Findings Of Fact Petitioner is an agency of the State of Florida charged with the responsibility and duty to prosecute violations of the statutes and rules regulating the practice of real estate in the State of Florida. Respondent, Benjamin C. Rolfe, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0318091 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Rolfe was as a broker with Squires Realty of the Palm Beaches, Inc., 721 U.S. 1, #217, North Palm Beach, Florida. Respondent, Duane C. Heiser, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0038233 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Heiser was as a broker effective February 8, 1991, at Duane C. Heiser Realty Co., 1312 Commerce Lane A1, Jupiter, Florida. On or about December 12, 1998, a Final Order was issued by the Florida Real Estate Commission and received by Mr. Heiser whereby his real estate broker's license was suspended for two (2) years from January 12, 1989, through January 10, 1991. During the month of October 1989, Mr. Heiser violated the lawful suspension order of the Commission by personally delivering rental checks to and ordering the disbursement of escrow funds from the Property Management-Operating Account, which is an escrow account, of Squire's Realty Company of the Palm Beaches, Inc. Between March 22 and March 26, 1990, the escrow account records of Mr. Rolfe, who was the qualifying broker for Squire's Realty of the Palm Beaches, Inc., were audited by Petitioner's authorized representatives. The Escrow/Trust Account Audit revealed that Respondent Rolfe failed to properly document and reconcile the Property Management-Operating Account, which is an escrow account. Mr. Rolfe was responsible for this account. Mr. Rolfe was negligent regarding the management of this escrow account by allowing a suspended licensee, Mr. Heiser, access to this account. Mr. Rolfe and Petitioner stipulated that the appropriate penalty for Mr. Rolfe's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation Mr. Rolfe would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Rolfe would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Rolfe to remain active and current as a real estate broker in the State of Florida. Mr. Heiser and Petitioner stipulated that the appropriate penalty for Mr. Heiser's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation, Mr. Heiser would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Heiser would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Heiser to remain active and current as a real estate broker in the State of Florida.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which: Dismisses Counts I, III, and V of the Administrative Complaint; Finds Mr. Heiser guilty of having violated a lawful order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), Florida Statutes, as alleged in Count II of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Heiser and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Heiser pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Heiser be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Heiser to remain active and current as a real estate broker in the State of Florida. Finds Mr. Rolfe guilty of culpable negligience in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, as alleged in Count IV of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Rolfe and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Rolfe pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Rolfe be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Rolfe to remain active and current as a real estate broker in the State of Florida. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 30th day of December, 1991. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 1991. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Neil F. Garfield, Esquire Garfied & Associates, P.A. World Executive Building Suite 333 3500 North State Road 7 Fort Lauderdale, Florida 33319 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent, John P. Wickersham ("Wickersham"), is licensed as a real estate broker under license number 0095775. Respondent, Aladdin Real Estate of Rockledge ("Aladdin"), is a Florida corporation registered as a real estate broker under license number 0213244. Wickersham is the qualifying broker and corporate officer for Aladdin. Respondents maintain their escrow account at the Barnett Bank of Cocoa. On April 28, 1994, Ms. Marie Ventura, Petitioner's investigator, audited Respondents' escrow account. Ms. Ventura concluded that Respondents' escrow account had a liability of $46,287.30 and a reconciled balance of $43,557.26. Ms. Ventura concluded that Respondents' escrow account had a shortage of $2,730.04. Respondents provided Ms. Ventura with additional information. On May 16, 1994, Ms. Ventura concluded that Respondents' escrow account had a liability of $43,546.21 and a reconciled balance of $42,787.26. Ms. Ventura concluded that Respondents' escrow account had an excess of $11.05. Respondents never had a shortage in their escrow account. Respondents maintained an excess of $11.05 in their escrow account since September, 1993. In September, 1993, Respondents converted their method of bookkeeping to a computer system. The computer system failed to disclose an excess of $11.05 due to Respondents' misunderstanding of the appropriate method of labeling inputs to the software system. Respondents discovered and corrected the error prior to the formal hearing. Respondents properly made and signed written monthly reconciliation statements comparing their total escrow liability with the reconciled bank balances of their escrow account. Although Respondents did not use the form suggested in Rule 61J2- 14.012(2), Respondents satisfied the substance of the requirements for record keeping and reporting. Respondents maintained the information required in Rule 61J2-14.012(2) in bank statements, ledger cards, and checkbooks. At the time of the formal hearing, Respondents presented the information in a form that complied with the requirements of Rule 61J2-14.012(2). The shortage determined by Petitioner on April 28, 1994, was caused, in part, by errors made by Petitioner's investigator. It was the investigator's first audit, and the information provided by Respondents was not in an easily discernible form. However, Respondents never withheld any information, and Respondents maintained and provided all information required by applicable law.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Section 475.25(1)(b) and Rule 61J2-14.012(2). RECOMMENDED this 18th day of January, 1996, in Tallahassee, Florida. DANIEL MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January 1996.
The Issue The issues are as follows: (a) whether Respondent failed to make documents available to Petitioner in violation of Section 475.5015, Florida Statutes; (b) whether Respondent obstructed or hindered the enforcement of Chapter 475, Florida Statutes, or hindered the performance of any person acting under the authority of that chapter in violation of Sections 475.25(1)(e) and 475.42(1)(i), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
Findings Of Fact Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida. Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it in 1999. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc. On or about September 11, 1998, Harper Fields, Esquire, filed a complaint with Petitioner. The complaint alleged that Respondent had mismanaged his wife's rental property pursuant to a property management agreement. The complaint resulted in an investigation and subsequent Administrative Complaint in DBPR Case No. 98-83963. That case became the subject of the Recommended Order in DOAH 02-2720PL, entered contemporaneously with the Recommended Order in the instant case. By letter dated November 25, 1998, Petitioner informed Respondent that Mr. Fields had filed a complaint against her. The letter stated that Petitioner's investigator, Sidney Miller, would be in contact with Respondent to discuss the complaint in detail. Respondent sent Mr. Miller a letter dated December 20, 1998. In the letter, Respondent attempted to explain her involvement in the management of the rental property owned by Mrs. Paula Fields. During the investigation of the complaint, Mr. Miller requested Respondent to furnish him all documentation related to the management of Mrs. Field's rental property. The initial request included documentation about the transaction for the months of February through April 1998, including, but not limited to, monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts and copies of supporting checks, deposits slips, and transfers. Soon thereafter, Respondent furnished Mr. Miller with some of the requested information. However, Respondent never provided Mr. Miller with a copy of the property management agreement at issue in DOAH Case No. 02-2720PL. Mr. Miller also requested information regarding any background check that Respondent conducted before renting Mrs. Field's property to Donnda Williams. Respondent provided this information to Mr. Miller under cover of a letter received by Mr. Miller on June 16, 1999. Mr. Miller's review of Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occur in an account than a corresponding bank statement. Mr. Miller also discerned that Respondent transferred $1,000 from her rental escrow account to her operating account on February 10, 1998. Additionally, Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances; but her March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20. Respondent transferred $1,000 on March 2, 1998, and $8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative balance on Respondent's monthly statement reconciliation for her rental escrow account. Mr. Miller addressed his concerns relating to Respondent's rental escrow account in writing on June 25, 1999, and verbally on June 29, 1999. Mr. Miller requested Respondent to explain the March 1998 transfers and the negative balances reflected in the monthly statement reconciliations for the rental escrow account in the months of February through April 1998. Mr. Miller's June 25, 1998, letter requested additional information, stating as follows: I will also need the deposit slips and reconciliation for the rental escrow account for January 1998 along with copies of the bank statements, reconiliation's [sic] and deposits slips for any other account you maintained in January 1998. In addition please provide me with copies of the reconciliation's [sic] for the escrow account and the rental escrow account from May 1998 through the month you closed these accounts. If you maintained any other real estate escrow accounts for the period of January 1998 to this date, provide me with the same information. Respondent received Mr. Miller's June 25, 1999, letter. However, she hired an attorney and forwarded to him the records that she believed were responsive to Mr. Miller's request. Mr. Miller did not learn that Respondent had hired an attorney until he talked to her on June 29, 1999. On or about June 29, 1999, Petitioner explained to Mr. Miller that she had been in the State of Washington caring for a sick relative during parts of January, February, and March 1998. She did not have her rental escrow account checkbook with her when disbursements were due from that account. Therefore, Respondent made the disbursements from her operating account. She made the transfers from her rental escrow account to her operating account to facilitate making the payments in this manner. Upon learning that counsel represented Respondent, Mr. Miller contacted the attorney by telephone. The purpose of the call, in part, was to request the attorney to file a letter of representation. Because the attorney was unavailable, Mr. Miller left a message requesting the attorney to return the call. The attorney did not respond to the message. After not receiving any further information from Respondent or her attorney, Mr. Miller sent Respondent a letter dated November 1, 1999. The letter requested the status of the records requested in Mr. Miller's June 25, 1999, letter. Respondent received the November 1, 1999, and forwarded it to her attorney. In a letter dated November 29, 1999, Respondent's attorney acknowledged that he had received Mr. Miller's November 1, 1999, letter. The attorney stated that he had instructed Respondent to furnish Mr. Miller with copies of the cashed checks for the two transfers that Mr. Miller was inquiring about. The November 29, 1999, letter from Respondent's attorney did not otherwise address the information requested by Mr. Miller's June 25, 1999, letter. In correspondence dated January 22, 2000, Respondent's attorney explained that Respondent had issued the attached copies of checks while she was in the State of Washington during her father's illness only to avoid delay in payment. Attached to the letter were copies of checks, front and back, of Respondent's operating account for her business, Park Avenue Properties, Inc. The copies of checks were issued in February through April 1998. Respondent had furnished Mr. Miller with copies of these checks in June 1999. The January 22, 2000, letter from Respondent's attorney was otherwise not responsive to Mr. Miller's June 25, 1999, letter. Specifically, there were no copies of deposit slips and reconciliation for the rental escrow account for January 1998. There were no documents or reference to the same information for any other accounts that Respondent maintained in 1998. There were no copies of the reconciliations for the rental escrow account from May 1998 through January or February 1999 when Respondent closed her accounts. During the hearing, Respondent admitted that the information furnished to Mr. Miller under cover of the January 22, 2000, letter was not responsive to the request in Mr. Miller's June 25, 1999, letter. At no time during the investigation did Respondent explain that the documents reflected paid personal expenses, as well as expenses paid on behalf of clients out of the same account. In a letter dated April 6, 2000, Mr. Miller sent yet another request for records and information to Respondent's attorney. This letter requested an explanation regarding certain transfers between Respondent's accounts on March 6, April 6, and April 14, 1998. Mr. Miller needed copies of the cancelled checks and better copies of the bank statement for January 1998 for the rental escrow account. Mr. Miller also requested the bank statements, reconciliations, deposit slips and cancelled checks for the rental escrow, and operating accounts for February 1998. The April 6, 2000, letter again requested information previously requested in June 1999. This information included the following: (a) deposit slips for the rental escrow account in January 1998, along with copies of the bank statements, reconciliations, and deposit slips for any other accounts that Respondent maintained in January 1998; (b) copies of the reconciliations for the operating account and the rental escrow account from May 1998 through the month that Respondent closed the accounts; and (c) the same information for any other real estate escrow accounts that Respondent maintained from January 1998 to June 25, 1999. Mr. Miller's April 6, 2000, letter was sent to Respondent's attorney by certified mail. The return receipt indicates that the attorney's office received the letter on April 10, 2000. In a letter dated October 26, 2000, Respondent's attorney sent Petitioner's counsel a letter. According to the letter, Respondent had provided copies of all the checks and the explanation behind the transactions. The letter states that the attorney had not heard from Mr. Miller after the attorney sent the January 2000 letter. On or about June 3, 2002, Respondent's attorney sent Petitioner's counsel some 351 pages of documents, indicating that they included all documents requested by Mr. Miller and that they were responsive to all discovery requests. However, clear and convincing evidence indicates that the documents were not responsive to Mr. Miller's June 25, 1999, and April 6, 2000, record requests. During the hearing, Respondent agreed that the documents were not responsive to Mr. Miller's requests for records related to Respondent's rental escrow account from May 1998 through the time she closed the account. Because Mr. Miller was unable to review the records he requested, he was unable to perform an audit of Respondent's accounts. Mr. Miller needed records covering a six-month period in order to audit Respondent's accounts. Without the records, Mr. Miller was unable to determine whether problems in Respondent's rental escrow account occurred at other times. Respondent testified during the hearing that she had provided Mr. Miller with all of the records in her possession. Her testimony in this regard is not persuasive. Respondent admitted that Chapter 475, Florida Statutes, required her to keep all of her records for four or five years. The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Department of Business and Professional Regulation, Division of Real Estate, enter a final order revoking Respondent's license. DONE AND ENTERED this 15th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 15th day of November, 2002. COPIES FURNISHED: Kenneth D. Cooper, Esquire 400 Southeast Eighth Street Fort Lauderdale, Florida 33316 Stacy N. Robinson Pierce, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N308 Orlando, Florida 32801-1772 Buddy Johnson, Director Nancy P. Campiglia, Chief Attorney Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issues are as follows: (a) whether Respondent is guilty of culpable negligence or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes; (b) whether Respondent is guilty of failure to maintain trust funds in any business transaction in violation of Section 475.25(1)(k), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
Findings Of Fact Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida. Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc. In December 1995, Respondent, as agent for Park Avenue Properties, Inc., entered into an agreement with Elizabeth Field (Miss Field) to rent and manage rental property located at 1709 Hall Drive, Tallahassee, Florida (the property). Mrs. Paula Field owned the property but authorized her daughter, Miss Field, to enter into the management agreement with Respondent. The management agreement states as follows in pertinent part: Owner Agrees: to give the Agent the following authority and agrees to assume all expenses connected with: to advertise the property, display a sign on it, and rent it; to investigate the references of prospective tenants; to sign leases for terms of no less than 12 months; to renew or cancel existing leases and negotiate new leases. * * * to terminate tenancies and sign and serve notices Agent deems necessary and Owner approves; to sue for and recover rent; to instigate eviction procedures. Owner will pay expenses of litigation including attorney's fees, and may select the attorney to handle such litigation. * * * to allow Agent to collect minimum rent of $600 and deposit it to owners account. . . . * * * to allow Agent to collect a security deposit of $600 and first month's rent in advance and deposit them in Agents escrow accounts. Escrow funds accrue no interest for Owner nor Agent and are not accounted for in Owner's monthly statements. * * * 7) to allow the Agent to withhold a commission of 10 percent of all rent due on leases during the management agreement period as compensation for the management services. Pursuant to the management agreement, Respondent facilitated Donnda T. Williams' application to rent the property. The application states that, upon its acceptance, it would become a lease agreement beginning on August 22, 1997, and continuing until July 31, 1998. According to the application, rent was payable in advance on the first day of each month in installments of $595 per month. Respondent checked Ms. Williams' references but did not otherwise investigate her credit. Respondent did not perform a public records search to determine whether Ms. Williams was the subject of prior eviction proceedings or whether she had civil judgments against her. Respondent subsequently accepted the application, which became a lease agreement. Ms. Williams was late in paying the rent in September through December 1997. Respondent had to "really chase" Ms. Williams to get the rent in November 1997 because the rent check bounced when Respondent deposited it the first time. Respondent's efforts to collect the November 1997 rent included contacting Ms. Williams' mother. At that time, Respondent learned about Ms. Williams' prior eviction in Leon County and prior civil judgments as described below. Respondent's father became seriously ill in January 1998. Respondent flew to the State of Washington to nurse her father and was out of the State of Florida for most of January, February, and March of 1998. During her father's illness, Respondent made several short trips back to her home in Tallahassee, Florida. After the death of Respondent's father, she returned to Tallahassee, Florida, in April 1998. Ms. Williams did not pay her January 1998 rent until late February 1998. Respondent did not receive any additional rent payments from Ms. Williams. On March 9, 1998, Respondent sent Ms. Williams a three-day notice demanding the payment of rent. The notice stated that Ms. Williams owed $1,190 in rent for February and March 1998. There is no evidence that Respondent sent Ms. Williams any other such notices. Sometime after March 9, 1998, Harper Field, Esquire, informed Respondent that he was going to try to collect the rent for his wife, Mrs. Field. Because he was unable to collect the April 1998 rent, Mr. Field sent Ms. Williams a second three-day notice demanding payment of rent. Mr. Field insisted that Respondent begin eviction proceedings against Ms. Williams in May 1998. In fact, Mr. Field "begged" Respondent to initiate these proceedings on his wife's behalf. Any evidence that Ms. Field requested Respondent to begin eviction proceedings in January or February 1998 is hearsay and in direct conflict with Respondent's testimony, which is credited in this regard. Respondent initiated an eviction proceeding against Ms. Williams on May 4, 1998. In a letter dated June 2, 1998, from Respondent to the circuit judge, Respondent stated as follows: (a) Ms. Williams had not paid any rent since paying the January 1998 rent in February 1998; (b) Ms. Williams was five months behind in paying her rent; (c) Ms. Williams was still living at the property; and (d) Ms. Williams has a prior eviction in Leon County, Florida, and had a judgment against her for not paying for her furniture. Respondent sent a copy of the letter to Mr. Field, informing him for the first time about Ms. Williams' prior eviction and about the civil judgments against her. The record indicates that First Union Bank secured a Final Judgment and Execution against Ms. Williams in May 1995. W.S. Badcock Corporation secured a Writ of Replevin and Possession against Ms. Williams in October 1996. In a third case, Charles Culp secured a Final Judgment for Eviction and a Writ of Possession against Ms. Williams in April 1997. There is persuasive evidence that Respondent became aware of these cases against Ms. William when Respondent contacted Ms. Williams' mother in November 1998. Ms. Williams vacated the property owing six months of rent for the months of February through July 1998 before Respondent's eviction proceeding against Ms. Williams was concluded. Ms. Williams "trashed" the property before she vacated it causing Mrs. Fields to incur out-of-pocket expenses for damages not covered by insurance. The record is not clear how Respondent's eviction case against Ms. Williams was finally resolved. However, the Administrative Complaint does not allege that Respondent was negligent in prosecuting the case. Mr. Fields subsequently filed a complaint with Petitioner alleging that Respondent had mismanaged the property. During the investigation of the complaint, Respondent furnished Petitioner with requested documentation regarding the entire Williams/Field transaction for the months of February through April 1998. The documentation included monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts, and copies of supporting checks, deposits slips, and transfers. Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occurred in the account than a corresponding bank statement. Respondent transferred $1,000 from her rental escrow account to her operating account on February 10, 1998. Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances. Respondent's March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20. She transferred $1,000 on March 2, 1998, and $8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative balance on Respondent's monthly statement reconciliation for her rental escrow account. Respondent made the transfers referenced above because she was in the State of Washington nursing her father when she was required to make disbursements from the rental escrow account. She claims that she went to see her father after receiving an emergency call that her father was gravely ill and that she grabbed her operating account checkbook to take with her. She did not have the rental escrow account checkbook with her so she transferred the money to her operating account and wrote the necessary disbursement checks from her operating account. Respondent flew home to Florida from the State of Washington for a few days in January 1998, and at the end of February and March 1998, before making her final trip home to Florida in April 1998. She did not explain why she did not pick up her rental escrow account checkbook on one of these trips so that she would not have to continue to disburse money from her operating account that should have been disbursed from her rental escrow account. More importantly, Respondent did not explain why her monthly statement reconciliations had negative balances. Respondent did not inform her clients that she was paying them from her operating account. The clients never noticed that Respondent paid them from the wrong account. All of the clients received the correct disbursements. Even so, Respondent knew she was not allowed to commingle funds in the two accounts and that she was required to keep all rental escrow funds in a separate account until disbursement was properly authorized. The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
The Issue The issues in the case are whether the allegations of the Administrative Complaint are correct, and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, Respondent Clifford Altemare (Mr. Altemare) was a licensed real estate broker, holding Florida license BK-3062479. At all times material to this case, Respondent Altema Consulting Co., LLC (ACC), was a licensed real estate brokerage, holding Florida license CQ-1024239. Clifford Altemare was the owner, qualifying broker, and officer for ACC. On August 21, 2006, Mr. Altemare signed an agreement to represent for sale hotel property owned by Sweet Hospitality, LLC. The agreement stated that Mr. Altemare would receive an unidentified commission based on the sales price. On December 12, 2006, Mr. Altemare received an escrow deposit of $25,000 from Rakesh Rathee, who signed an agreement to purchase the hotel. The $25,000 deposit was transferred by wire from Rakesh Rathee into a corporate operating account of ACC. Mr. Altemare failed to place the $25,000 escrow deposit into an ACC escrow account. Apparently, because the seller decided not to sell the property, the proposed sale did not close, and the buyer demanded the return of the $25,000 deposit. There is no credible evidence that the seller has made any claim upon the deposit. Mr. Altemare has refused to return the $25,000 deposit to Rakesh Rathee. At the hearing, Mr. Altemare asserted that the deposit has not been returned to the buyer because of uncertainty as to whom the deposit should be refunded. There was no credible evidence offered at the hearing to support the assertion that someone other than Rakesh Rathee should received a refund of the $25,000 deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order, stating that the Respondents violated Subsections 475.25(1)(b), (d), and (e), Florida Statutes (2006), and Florida Administrative Code Rule 61J2-14.010 and imposing a $15,000 administrative fine and a five-year suspension of licensure. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2010. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801 Clifford Altemare Altema Consulting Co., LLC 1047 Iroquois Street Clearwater, Florida 33755 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801
The Issue The issue for consideration in this case is whether the Respondents' Florida licenses as real estate broker, salesperson and brokerage corporation, respectively, should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Division of Real Estate, was the state agency in Florida responsible for the regulation of the real estate profession and the licensing of real estate professionals. Respondents Frank E. Smith, Elaine M Smith, and Sunshine Properties of Tampa, Inc., were licensed real estate professionals, a broker, a sales person, and a brokerage corporation respectively. Respondent Frank E. Smith was the qualifying broker for Respondent, Sunshine Properties of Tampa, Inc.. On or about July 23, 1991, the Respondents and Carolyn Chaple entered into a management agreement whereby Respondent agreed to rent and manage Ms. Chaple's residence located in Tampa. The terms of the management agreement signed by Ms. Chaple and Ms. Smith called for the company to render a monthly statement of receipts, charges and disbursements, and to remit the net proceeds each month to Ms. Chaple whose address was listed in the agreement as P.O. Box 12003, Brooksville, Florida 34601. For performing this service, Respondents were to receive a commission of 8% of the monthly gross receipts. The agreement also called for the Respondents to: ... hire, discharge and pay all engineers, janitors and other employees; to make or cause to be made all ordinary repairs and replacements necessary to preserve the premises in its present condition and for the operating efficiency thereof and all alterations required to comply with lease requirements, and to do decorating on the premises; to negotiate contracts for nonrecurring items not exceeding $100.00 and to enter into agreements for all necessary repairs, maintenance, minor alterations and utility services; and to purchase supplies and pay all bills. An amendment to the agreement, initialed by Ms. Chaple only, made the provision subject to a lease agreement purportedly attached but which was not offered into evidence. Ms. Chaple contends that lease provided she would be responsible only for those repairs costing in excess of $250.00 and which she had approved. This added provision was not, however, initialed by Respondents and, therefore, never became a binding part of the management agreement, regardless of what Ms. Chaple intended. Ms. Smith asserts that if Ms. Chaple had insisted on that change, she would not have entered into the agreement. It is found, therefore, that there was no agreement limiting Ms. Chaple's liability for repairs. Pursuant to the management agreement, Respondents solicited and obtained tenants for Ms. Chaple's property. Respondent admittedly did not send a copy of the first lease to Ms. Chaple, but the tenancy was short lived and terminated when the tenant moved out owing rent. Ms. Chaple claims the Respondents did not advise her of this situation. Instead, she claims, she heard of it from neighbors. However, on December 30, 1991, Respondents obtained another lessee for the property at a rental of $600.00 per month for 12 months. Respondents' fee was %8 of that ($48.00) resulting in a net monthly rental to Ms. Chaple, exclusive of repair expenses if any, of $552.00 per month. Ms. Chaple claims that though she repeatedly asked for a copy of the management agreement she had signed, she never got one. When she began to ask for accountings, she says she got some but not all. By the same token, she claims she did not get all the receipts relating to the repair work done on her property. Between December 4, 1991 and August 16, 1992, Ms. Chaple wrote several detailed letters to the Respondents requesting information on the status of the first tenancy and efforts being made to receive compensation, and detailed explanations for expenditures made and charged to her on the account statements that were sent. She also complained of the lateness of the statements, of the Respondents' notice of intended termination of the agreement, and an explanation of large expense charged almost every month. Respondents claim they furnished Ms. Chaple a copy of the management agreement on at least 3 separate occasions by mailing a copy to her Brooksville address, that address listed for her in the agreement. Ms. Chaple, however, was living in Houston, Texas during all this period and requested the use of the Brooksville address, apparently her father's post office box. Respondents also claim they sent Ms. Chaple a monthly statement of account along with her net rent check each month. Every check sent was cashed by Ms. Chaple indicating she received them. There is no explanation as to why she did not also receive the account statements. In light of Ms. Chaple's moves, and the use of an intermediary to transmit mail, it cannot be said Respondents did not send the agreements. This is not to say Ms. Chaple did receive them all, merely that the Respondents dispatched them to her. Ms. Chaple also claimed she never got a copy of a lease from the Respondents. Respondent, Elaine Smith, admits this indicating she did not send copies of leases to owners as a matter of practice. It is noted that Ms. Chaple repeatedly requested itemized explanations for the major expenditures deducted from the rent each month and characterized on the account statement solely as "maintenance." The management agreement obliging the owner to pay for such expenditures as a deduction from rent is silent on the need on the Respondents to explain such deductions. The agreement obliges the agent to "render a monthly statement of receipts, disbursements and charges and to remit each month the net proceeds to the [owner]." While it may be true the monthly statement of accounting showing "maintenance" might be acceptable evidence to the Internal Revenue Service, when, as here, such expenses are relatively large and frequent, it is not at all unusual or unreasonable for the owner to request and expect to receive an explanation of those deductions. To be sure, Respondents did send some receipts as requested, but it is clear they did not do so in all cases. Clearly the mere use of the word, "maintenance" does not constitute a sufficient showing of "disbursements" or "charges" as are called for in the agreement. This is so especially in light of the fact Respondents also operated a maintenance company through which they contracted for almost all maintenance and repair work except air conditioning. The charge to the owners was cost plus 10%. Ms. Chaple ultimately filed a complaint with the Division which, on March 18, 1992, sent its investigator, J.L. Graham, to the Respondents' office. As a part of her investigations, Ms. Graham did an audit of the Respondents' escrow accounts maintained at the Sun Bank in Tampa. She discovered that Respondents maintained a security escrow account which had a shortage of $5,780.00 and a rental escrow account which had a shortage of $4,261.31. Respondents admit a shortage had existed ever since the business was purchased in 1986 and claim that due to the shrinking inventory of properties they managed, the need to pay $500.00 a month on the purchase price, and $1,300.00 a month on obligated rent, they did not have sufficient income from operations to reimburse the accounts the amount of the shortages. There is no evidence that Respondents misappropriated any of the funds represented by the shortages and it is accepted they did not cause or increase either shortage. However, it is equally true they did nothing to eradicate or reduce either, routinely drawing their lawful commissions which were placed in the company's operating account and used to pay routine expenses. In any event, within 2 days of Ms. Graham's inspection, Respondents borrowed the money to reimburse the escrow accounts for the amount of the shortages in full. Ms. Graham also found that Respondents failed to prepare and sign written monthly reconciliations of the escrow accounts and had no supporting documentation for the accounts other than the check register, leases and the management agreements. Respondents' books were primarily kept in a computer and the information in support of the escrow accounts was not being kept in a manner readily accessible to the Division's representatives. Mr. Smith admits he did not do the required reconciliations, claiming that between the computer records and the bank statements, he knew what was going on. This is insufficient to satisfy the Division's requirements. Mr. Smith contends that immediately after the audit, he began doing the required reconciliations and would be willing to furnish them to the Division on a repeated basis if necessary. Respondents also failed to prepare and furnish to the tenants of clients' properties the required disclosure of agency relationship, notifying the tenants in writing that they, Respondents, represented the respective landlords, not them. Respondents asserted they made it clear to each tenant that they did not own the units being rented, but this does not meet the rule or statutory requirement. Review of the corporation records also revealed that Mrs. Smith, a licensed salesperson, was listed as an officer of the brokerage corporation. Respondents admit this but claim they did not know it was improper and that their accountant failed to so advise them. Gennie Amick has known and been friends with Respondents for more than 7 years. She has used their services in the past as managers of property she then owned and both her son and her daughter do so at the present time. They have had absolutely no complaints about the Respondents' management. Ms. Amick knows Mrs. Smith very well and considers her to be a very honorable person. Respondent's integrity has never been questioned, to the best of Amick's knowledge, and she goes out of her way to help her clients, doing more than her contract requires of her. Mr. Smith is also an honorable person. Because of Ms. Amick's trust in the Respondents, she loaned them $6,000.00 when she learned of their difficulties with the Division and this loan was repaid when Respondents thereafter mortgaged their home. Respondents have owned Sunshine Properties of Tampa, Inc. since they bought it in 1986, paying $20,000.00 for the business. They put $1,500.00 down and agreed to pay the balance off at $500.00 per month. They also agreed with the seller to rent his office for $1,300.00 per month. It was these commitments, and the shrinking of the client list, which prevented them from making up the shortages in the escrow accounts. Mr. Smith has been in the real estate business, both in Florida and elsewhere, since 1967. He has been licensed as a broker since 1988 and he and his wife have operated Sunshine, which does not handle sales, only property management, since 1986. It is their livelihood. He became the qualifying broker for the firm in 1988. Neither he nor Mrs. Smith has been the subject of a complaint before now. At no time did either Respondent intend to break any rules or to unlawfully profit by their improper actions. They claim any infractions are as a result of ignorance rather than design and so it would appear. Their relationship with Ms. Chaple was less than an acceptable business relationship, yet Ms. Chaple did not make a good witness. It appeared she had her own agenda to follow and her memory of facts seemed selective. She appears to be difficult to deal with and it is reasonable to believe that much of the difficulty she had with the Respondents was as a result of her own attitude and approach.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that a Final Order be entered placing all Respondents' licenses on probation for a period of 1 year under such terms and conditions as may be prescribed by the Division and imposing an administrative file of $500.00 upon each Respondent Smith for a total fine of $1,000.00. RECOMMENDED this 18th day of February, 1993, in Tallahassee, Florida. 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 18th day of February, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-3898 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: 1. - 5. Accepted and incorporated herein. Accepted and incorporated herein except for the word, solicited. & 8. Accepted and incorporated herein, Rejected as not established by clear and convincing evidence. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 4. Accepted and incorporated herein 5. Accepted to the extent that the evidence shows the agree-ment and accountings were sent to the best evidence available to the Respondents. 6. Not a Finding of Fact but a Conclusion of Law, 7. & 8. More a comment on the state of the evidence, than a Finding of Fact. 9. & 10. Accepted and incorporated herein. 11. - 14. Accepted. Rejected as implying the disclosures made satisfied the rule requirements. Accepted. & 18. Accepted as to what Respondent's did and that no harm to the public or any client resulted, but rejected to the extent public benefit is asserted. 19. & 20. Accepted but relevant only to the quantum of punishment to be imposed. 21. - 23. Accepted. 24. - 26. Accepted and incorporated herein. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate Hurston Building - N308 400 West Robinson Street Orlando, Florida 32801-1772 Sheldon L. Wind, Esquire 110 E. Hillsborough Avenue Tampa, Florida 33504 Jack McRay General Counsel DPR 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
