Findings Of Fact In February of 1988, Petitioner took the real estate broker's examination compiled by Respondent, and otherwise complied with all applicable licensure requirements. The Petitioner received a grade of 74 on the written examination. A grade of 75 or higher is required to pass the test. Had Petitioner answered question number 62 with the answer deemed by Respondent to be correct, Petitioner's score would have been 75 and, as such, would have entitled him to licensure. Question number 62 reads as follows: The Department of Professional Regulation may withhold notification to a licensee that the licensee is being investigated IF: NOTIFICATION COULD BE DETRIMENTAL TO THE INVESTIGATION. NOTIFICATION COULD BE DETRIMENTAL TO THE LICENSEE. THE ACT UNDER INVESTIGATION IS A CRIMINAL OFFENSE. Possible answers to question number 62 were as follows: I only. II only. I and III only. I, II and III. The answer to question number 62 chosen by Petitioner was D. The Respondent determined the correct answer should have been C. The Respondent's examining board followed a standard procedure for conducting and grading the examination. Statistically, 58 per cent of candidates taking the examination and placing in percentile rankings 50 through 99, answered the question correctly. Of those candidates taking the examination and placing in the lower half (0-50 percentile), 33 per cent answered the question correctly. The results obtained to question number 62 from all applicants taking the examination revealed the question exceeded effective testing standards. Question number 62 and the appropriate answer to that question are taken directly from section 455.225(1), Florida Statutes. The purpose of the question is to determine if an applicant is knowledgeable of the law governing real estate broker licensees. The Respondent adopts the position that section 455.225(1), Florida Statutes, mandates that Respondent shall notify a licensee of any investigation of which the licensee is the subject and authorizes withholding notification to that licensee only where such notification would be detrimental to the investigation, or where the act under investigation is a criminal offense. The Petitioner takes the position that section 455.225(1), Florida Statutes, does not prohibit withholding notification of an investigation from a licensee when such notification would be detrimental to the licensee. The Petitioner bases this contention on the broad power provided the Real Estate Commission by section 475.05, Florida Statutes. The Commission has not, however, adopted any rule, regulation or bylaw supportive of Petitioner's position and the statutory mandate is clear. Further, the statute referenced by Petitioner specifically does not support an exercise of this power of the Commission if the result is a conflict with another law of the State of Florida. Section 455.225(1), Florida Statutes, states Respondent "shall" notify "any person" of an investigation of that person. Under that section, discretionary authority to refrain from such notification is allowed only where there is a potential for harm to the investigation, or the matter under investigation is a criminal act.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered confirming the grade of the Petitioner as previously determined. DONE AND RECOMMENDED this 20th day of July, 1988, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2442 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings The Petitioner submitted a document entitled summary of hearing and consisting of seven numbered paragraphs. They are treated as follows: Rejected as unnecessary. Included in findings 5, and 7. Rejected, contrary to the weight of the evidence. 4.- 6. Rejected, contrary to evidence adduced. 7. Rejected as argument. Respondent's Proposed Findings The Respondent submitted a three page document entitled "argument" and consisting of eight unnumbered paragraphs. Numbers 1-8 have been applied to those paragraphs. They are treated as follows: 1.-5. Rejected as conclusions of law. 6. Included in findings 8, 9, and 10. COPIES FURNISHED: H. Reynolds Sampson, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Darlene F. Keller Acting Director Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Phillip I. Salerno 11812 Timbers Way Boca Raton, Florida 33428 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue This case was presented on an administrative complaint filed by the Florida Real Estate Commission against Florida Vantage Properties, Inc. and Richard Stewart Grimes, alleging that the Respondents were guilty of violation of Section 475.42(1)(j), Florida Statutes, by having placed or caused to be placed upon the public records of Palm Beach County, a written document which purports to effect the title of, or encumber, real property; and the recording of which was not duly authorizod by the owner of the property and for the purpose of collecting or coercing the money to the Respondents. The Florida Real Estate Commission introduced evidence that the Respondent Grimes, in behalf of the Respondent Florida Vantage Properties, Inc., (hereafter Vantage) filed an affidavit with an attached letter of agreement, which was Introduced and received into evidence as Exhibit 2, in the public records of Palm Beach County. The Florida Real Estate Commission introduced other evidence that Grimes caused those documents to be placed upon public records of Palm Beach County without the authority of the owner of the property which was the subject of the documents and for the purpose of collecting or coercing the payment of money to the Respondents. The Respondents introduced evidence concerning the documents which had been placed on the public records of Palm Beach, County concerning their original execution, purpose, and circumstances surrounding their having been placed upon the public records. Based upon the evidence presented, the issue of fact presented in this case is whether the affidavit and letter of agreement (Exhibit 2) purports to effect the title of or encumber the subject real property?
Findings Of Fact Richard Stewart Grimes and Florida Vantage Properties, Inc. are registered real estate brokers holding registrations issued by the Florida Real Estate Commission. Grimes, together with his two co-owners, sold C.W. Collins Corporation, hereafter Collins Corp., the following real property pursuant to a deposit receipt contract executed on August 20, 1973 and identified and introduced into evidence as Exhibit 4. Lot 6, Block 2, & Lots 5, 9, & 11, Block 5, Carriage Hill, as recorded in Plat Book 30, Pages 67 & 68 of the Public Records of Palm Beach County. The deposit receipt contract (Exhibit 4) was the product of negotiations entered into between Collins Corp. and Grimes and his co-owners. These negotiations had resulted in the execution of a deposit receipt contract identified and received into evidence as Exhibit 6. This deposit receipt contract addressed the proposed purchase of six lots to include the four lots eventually sold pursuant to the deposit receipt contract (Exhibit 4). Also introduced and received into evidence was a letter of agreement covering the property described in the deposit receipt contract (Exhibit 6). This letter of agreement is the same in all respects as the latter of agreement in Exhibit 2 with the exception that it addressed the two additional lots which, were the subject of the deposit receipt contract (Exhibit 6). The evidence introduced, to include the exhibits referended above, show that a portion of the consideration for the sale of the property to Collins Corp. was the letter of agreement (Exhibit 2) which contained an exclusive right of sale for Vantage and a deferred payment agreement under which Collins Corp agreed to Pay Vantage $1,000 on each lot sold by Collins Corp. Both Grimes and Collins agreed that the exclusive right of sale had been terminated prior to the date Exhibit 2 was filed in the public records of Palm Beach County, November 6, 1975. However, Collins Corp. could not unilaterally terminate the deferred payment agreement expressed in the last sentence of the letter of agreement as follows: C. W. COLLINS CORP. may also sell the property themself (sic) and will then pay only a $1,000.00 fee to FLORIDA VANTAGE PROPERTIES, INC. on each lot or house and lot package at time of closing. Grimes, as chief officer of Vantage, consulted legal counsel when Collins Corp. failed to pay $1,000 to Vantage when the corporation sold the first lot. Grimes authorized counsel to take action to obtain payment of the monies due Vantage from Collins Corp. As a result, Grimes executed the affidavit of October 7, 1975 (Exhibit 2) and caused this to be placed on the public records of Palm Beach County by counsel for Vantage and Grimes. Neither the affidavit nor the letter of agreement assert any interest in the subject property and the filing in no way constituted a notice of lis pendens.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission take no action on the complaint against Florida Vantage Properties, Inc. or Richard Stewart Crimes. DONE AND ORDERED this 4th day of August, 1975, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 APPENDIX The Respondent timely filed Proposed Findings of Fact (PFF) in this cause, which were considered by the Hearing Officer as follows: Paragraphs 1 and 2 of PFF are incorporated in paragraph 1 of the Recommended Order (RD). Paragraphs 3 and 4 of PFF are incorporated in paragraph 2 of the RD. Paragraph 5 of PFF is incorporated in paragraph 3 of the RD. Paragraphs 6, 7, 8 & 10 of PFF are incorporated in paragraph 4 of the RD. Paragraphs 9, 11, 12,13 and 14 are not material to consideration of the issue presented. Paragraph 15 is consistent with the ultimate conclusion of law reached in the RD. COPIES FURNISHED: John Huskins, Esquire Staff Counsel Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Arthur C. Koske, Esquire Post Office Box 478 299 West Camino Gardens Blvd. Boca Raton, Florida 33432 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION FLORIDA REAL ESTATE COMMISSION CD 14999 Petitioner, PROGRESS DOCKET vs. NO. 3283 FLORIDA VANTAGE PROPERTIES, INC. and RICHARD STEWART GRIMES DOAH NO. 78-696 Respondents. PALM BEACH COUNTY /
The Issue Whether Respondents improperly charged a real estate client a fee for document preparation and storage and, if so, what penalty should be imposed.
Findings Of Fact Respondent CMT Holding, Ltd., trading as the Prudential Florida Realty (CMT), is a limited partnership registered as a real estate broker, holding license number 0266433. Respondent CMT Holdings, Ltd., is registered as a real estate broker, holding license number 0266412. Respondent Patricia A. Brotherton (Brotherton) is registered as a real estate broker, holding license number 0601688. At all material times, Brotherton was the Naples branch manager for CMT. At all material times, Judith Price was a real estate salesperson employed by CMT. On October 3, John Iraci, as buyer, and Donald J. and Beryl B. Cullette, as sellers, entered into a contract for the sale of a condominium for $210,000. The contract acknowledges that CMT is the selling broker and an unrelated broker is the listing broker. CMT also executed the contract as the escrow agent holding the $1000 deposit. The Cullettes signed the contract on October 3 and counteroffered $210,000, rejecting Iraci's offer of $200,000. Iraci accepted the counteroffer. Price and CMT entered into an agency agreement with Iraci the previous month. The Agency Disclosure form that they signed promised that Price and CMT would make full disclosure to Iraci. On October 2, Price presented Iraci with a Real Property Disclosure Statement. She reviewed with him the expenses to be paid by buyer, including an item identified as "Processing and document preparation fee." Although the form does not disclose actual expenses, except for the rate at which statutorily imposed charges are imposed, Price explained to Iraci that the processing and document preparation fee was $110 paid to CMT. Iraci expressed no objection to the charges, and Price prepared the October 3 sales contract. On January 3, 1996, Respondent sent the closing agent, attorney Louis X. Amato, a document entitled, "Fund Disbursement Instructions." The document instructed Amato to divide the $12,600 real estate commission equally between the two brokers and pay CMT an additional $110 for a processing and document preparation fee, which will be a buyer's expense on the closing statement. Amato refused to add the $110 fee to the closing statement or charge Iraci for this expense. On January 8, 1996, Amato sent a letter to Petitioner complaining of this practice. On the next day, the sale closed without payment of the $110 fee to CMT. At the closing, Iraci executed a first mortgage note and lien. Iraci visited Price on the day of the closing to discuss Amato's refusal to collect this fee. Price said that she would pay the fee, if Iraci did not. Iraci returned to Price's office on January 15 and paid the fee. Four months later, Price and CMT sold Iraci's former condominium. Iraci paid the $110 fee on this transaction. No litigation or complaint ensued. The purpose of the $110 fee is to compensate CMT for the costs of preparing and storing documents. There is no evidence that the fee is disproportionate to the preparation and storage expenses. On occasions where the $110 fee has been inadvertently omitted from the closing statement, Price has paid it herself. Petitioner filed the Administrative Complaint more than one year after the closing and payment of the fee by Iraci.
Recommendation It is RECOMMENDED: That the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Respondents and denying their request for attorney's fees. DONE AND ORDERED this 6th day of November, 1997, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Geoffrey T. Kirk, Esquire Daniel Villazon, Esquire Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 6th day of November, 1997. James H. Gillis, Esquire Gillis and Wilsen Suite B 1415 East Robinson Street Orlando, Florida 32801 Jeffrey D. Fridkin, Attorney Thomas G. Norsworthy, Attorney Grant Fridkin & Pearson, P.A. Pelican Bay Corporate Centre 5551 Ridgewood Drive, Suite 501 Naples, Florida 34108 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900
The Issue The issue in this case is whether Petitioner, a licensed Florida real estate sales associate, violated provisions of Subsections 475.25(1)(b), 475.25(1)(d)1., 475.25(1)(e), 475.42(1)(b), and 475.42(1)(d), Florida Statutes (2007),1 and, if so, what discipline should be imposed.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate (the Department), is the state agency responsible for licensing and monitoring real estate sales associates within the state. It is charged also with the duty to prosecute administrative complaints for violations of the law by real estate sales associates. Respondent, Caroline Mohan (Ms. Mohan), is a licensed real estate sales associate who holds License No. 3087231. She was registered as a sales associate with Coral Shores Realty (Coral Shores) in Fort Lauderdale, Florida, from September 12, 2005, to March 28, 2008. At all times relevant to the charges against her, Ms. Mohan was the Coral Shores sales associate who was the listing agent for Anthony Mannarino, the seller of property located at 10530 Versailles Boulevard, Wellington, Florida (the "subject property"). At closing, Coral Shores was to have received at 2.5 percent commission and pay a portion of the commission to Ms. Mohan. Dawn Campbell and Garth Smith (the buyers) entered into a Residential Sale and Purchase Contract (the Contract) to purchase the subject property from Mr. Mannarino. Pursuant to the contract, the buyers were to deposit $10,000 in an escrow account in two $5,000 installments. The Contract was signed on or about March 12, 2007. The transactions took place electronically and Mr. Smith sent Ms. Mohan a photocopy of a $5,000 check that he was supposed to have deposited, under the terms of the contract, in the account of Closings Unlimited Title Company (Closings Unlimited), but he never sent the check to Closings Unlimited. The seller asked Ms. Mohan to have the buyer use a different escrow agent, Southeast Land Title (Southeast), and so the buyer wired $5,000.00 to Southeast, but the Contract was not amended to reflect the name of the new escrow agent. A $5,000 deposit was sent to Southeast by the buyers, but they never paid the $5,000 balance due on the deposit. Mr. Smith testified the he could not make the second payment because he gave $5,000 in cash to an employee to deposit in his account so that he could make a wire transfer, but the employee took the money. On April 3, 2007, Southeast faxed a notice to Coral Shores, with an attached letter to the buyers, informing them of its intention to respond to a demand (presumably by the seller) to release the $5,000 held in escrow related to the subject property. As a result of a complaint filed by Dorothy Hoyt, a representative of Southeast, the matter was investigated and an Administrative Complaint filed against Respondent. The Administrative Complaint alleges that Ms. Mohan personally received funds, fraudulently failed to account for those funds, and acted, without the proper license, as a broker by accepting the deposit. The Department's investigator testified that he was never able to determine if the escrow deposit was deposited at any bank, lending institution or with Dorothy Hoyt of Southeast Land Title of Boca Raton. He "believe[s] there was a wire for one deposit made, but [he] did not receive confirmation of that." Regarding his conversations with Ms. Hoyt, the investigator reported "she did state that . . . she had received - eventually received $5,000.00 and was still waiting [for] another $5,000.00 in order to have the full $10,000.00 deposit." In his report, the Department's investigator claimed that Respondent was terminated from employment by her Coral Shores broker, Ronald Cika, as a result of her misconduct in handling transactions related to the subject property. That claim was contradicted by Mr. Cika and by Ms. Mohan. Their testimony was supported by the contents of e-mails between his office and Respondent that show that she became inactive as a realtor while traveling overseas with an offer to reactivate with the same broker upon her return. Mr. Cika testified that he is aware of a lawsuit filed by Dawn Campbell related to a different address on the same street, 10526 Versailles Boulevard, but that he is not aware of any issues related to 10530 Versailles Boulevard, the subject property. Jannet Rodriguez, owner of Closings Unlimited, testified that she was never contacted and never opened a file to serve as either an escrow or closing agent for the subject property at 10530 Versailles Boulevard. She, too, is involved only in issues related to 10526 Versailles Boulevard.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate, dismissing the complaint against Respondent, Caroline Mohan. DONE AND ENTERED this 12th day of June, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 June, 2009.
The Issue Whether the Department of Financial Services (the “Department”) correctly denied the unclaimed property claim submitted by Choice Plus, LLC (“Choice Plus” or “Petitioner”), on behalf of Louis Nardi as attorney-in-fact for Felicia Leggiero (“Leggiero”).
Findings Of Fact Based on the evidence presented at the hearing, and the record as a whole, the undersigned makes the following findings of relevant and material fact: Choice Plus is registered with the Department as a “claimant’s representative” pursuant to section 717.1400, Florida Statutes (2020). In Florida, a claimant’s representative may file claims with the Department on behalf of owners of unclaimed property for a fee. See Joint Ex. 1, Bates Nos. 0001-17. The Department is the state agency charged with the responsibility of administering and processing claims, pursuant to the provisions of chapter 717, the Florida Disposition of Unclaimed Property Act (“Act”). See Joint Ex. 4, Bates No. 0045. Between 2005 and 2018, the Department received unclaimed stock shares and dividends reported in the names of John R. Leggiero and Felicia R. Leggiero, from various holders. The Department currently maintains the funds, totaling $116,322.10, in 24 unclaimed property accounts. See Joint Ex. 1, Bates Nos. 0001-3. The Claim by Choice Plus On or about May 26, 2020, Choice Plus filed a written claim, No. C8610372, on behalf of Louis Nardi, as attorney-in-fact for Felicia R. Leggiero, for 24 unclaimed property accounts. In support of the claim, Choice Plus provided the Department a copy of a Limited Power of Attorney (“LPOA”) and full disclosure statement, pursuant to section 717.135, executed by Louis Nardi; a copy of Louis Nardi’s driver’s license; a copy of Leggiero’s driver’s license; a Florida Certificate of Death for John R. Leggiero, indicating that he predeceased Felicia R. Leggiero; a copy of a durable power of attorney where Leggiero designated her brother, Louis Nardi, as her attorney-in-fact; and the results of a TLO.com search.1 See Joint Ex. 1, Bates Nos. 0001-17. The LPOA and full disclosure statement, executed on May 4, 2020, authorized Choice Plus to file a claim on behalf of Louis Nardi as attorney-in- fact for Felicia R. Leggiero, for a fee of $11,632.21. § 717.135, Fla. Stat. The LPOA included the following language: CP offers to advance its expertise and financial resources, including legal expenses, on Claimant’s behalf, to prove entitlement and secure release of property from any person or entity in possession of property. In exchange for CP’s resources Claimant irrevocably assigns Claimant’s right, title and interest in property up to the amount and/or percentage reference above as Compensation. If CP 1 A people and business location system that searches public and proprietary databases. fails to document Claimant’s entitlement, nothing will be owed to CP. See Joint Ex. 1, Bates Nos. 0004-5. As a part of the Department’s statutorily mandated review of the claim submitted by Choice Plus, it conducted a Driver and Vehicle Information Database (“DAVID”) search for Leggiero on June 17, 2020. The search indicated that she died on May 27, 2020. See Joint Ex. 4, ¶ 3; and Joint Ex. 5, Bates No. 0042. In part, because of her death, the Department issued a Request for Information (“RFI”) on June 18, 2020, to Choice Plus. The RFI noted that Felicia R. Leggiero was deceased, and requested probate documentation for her estate. See Joint Ex. 2, Bates No. 0018. As it turns out, this is a common request when the Department has questions or concerns about a claim that is filed, or needs additional documentation as it sorts through and evaluates the merits of a claim. On July 13, 2020, the Department received Choice Plus’s response to the RFI. The response consisted of a four-page memorandum which extensively outlined the law and the position of Choice Plus on the claim. In the memorandum, Choice Plus took the position that the claim was complete when filed, and that the claim determination was retroactive to the date of filing the claim. See Joint Ex. 3. Choice Plus further argued that the Department should not consider subsequent events, i.e., the death of the claimant, when determining entitlement to the unclaimed property. Interestingly, however, it took the position that the Department must pay the claim to the “estate” of the deceased claimant. Id. However, and of particular note, Choice Plus provided no documentation to show that (1) Felicia R. Leggiero’s estate had been submitted to probate court for administration; (2) that Choice Plus represented Felicia Leggiero’s estate; or (3) represented the personal representative of her estate. See Joint Ex. 3, Bates Nos. 0019-24. After its review of the claim file and the memorandum submitted by Choice Plus, the Department issued a Notice of Intent (“NOI”) on October 20, 2020, stating that it would enter a final order denying the claim filed by Choice Plus on behalf of Louis Nardi as attorney-in-fact for Felicia R. Leggiero. The Department took the position, essentially, that at the time it began its review of the claim, Leggiero had already died and that, therefore, as a matter of law, Leggiero no longer had any legal or beneficial entitlement to the unclaimed funds, as entitlement had already vested in her estate. See Joint Ex. 4, Bates Nos. 0045-49, ¶¶ 11-13. Director Graham also testified that the Department’s treatment of this particular claim was consistent with the Department’s treatment of similarly situated claims where the claimant or person entitled to the property dies after submitting a claim to the Department, but before the Department has the opportunity to review and evaluate the claim.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order affirming the denial of Petitioner’s claim. However, it is recommended that the Department should accept and consider the submission of a supplemental claim by any lawful beneficiaries or heirs of Felicia Leggiero to determine entitlement pursuant to the provisions of chapter 717 and other provisions of law. DONE AND ENTERED this 3rd day of March, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Michael A. Alao, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 Diane Wint, Agency Clerk Division of Legal Services Department of Financial Services Room 612.14, Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0390 S ROBERT L. KILBRIDE Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 2021. Michael J. Farrar, Esquire Michael J. Farrar, P.A. 18851 Northeast 29th Avenue, Suite 700 Aventura, Florida 33180
The Issue The issue in this case is whether Respondent, Joseph John Ripa, committed the offenses alleged in a First Amended Administrative Complaint issued by Petitioner, the Department of Financial Services, on May 11, 2006, and amended on October 16, 2006, and, if so, what penalty should be imposed.
Findings Of Fact The Parties. Petitioner, the Department of Financial Services (hereinafter referred to as the "Department"), is the agency of the State of Florida charged with the responsibility for, among other things, the investigation and prosecution of complaints against individuals licensed to conduct insurance business in Florida. Ch. 626, Fla. Stat.1 Respondent Joseph John Ripa was, at the times relevant, licensed in Florida as a life and health (2-18) insurance agent. Mr. Ripa's license number is A220906. At the times relevant to this matter, Mr. Ripa was associated as an agent with Fidelity Assurance, Inc. (hereinafter referred to as "Fidelity Assurance"), an insurance agency. As an agent for Fidelity Assurance, Mr. Ripa sold annuities, including equity indexed annuities, to a target clientele of individuals 65 years of age or older. Equity Indexed Annuities. Very broadly speaking, an "annuity" is an insurance/investment product whereby a person invests money in exchange for regular payments over a period certain, over one or more specified individuals' lifetimes, or over a combination of life(s) and a period certain. There are two primary types of annuities: one is called a "fixed" annuity because payments are made in fixed amounts or in amounts that increase by a fixed percentage; the other is called a "variable" annuity because payments vary according to the investment performance of a specific type of investments, typically bond and equity mutual funds. Fixed annuities maybe "deferred" or "immediate." With a deferred fixed annuity, an investment of money is made and the earnings thereon are deferred both in payment and for tax purposes until payment at a later time. An immediate fixed annuity is one where an investment of money is made and payments (a potion of principal and earnings) begin immediately. Immediate annuities usually have "mortality" component also: upon the death of the annuitant, payments are made to a beneficiary. Within the past ten years or so, equity indexed deferred annuities, a form of fixed annuity, has been developed and marketed in Florida. The features of this type of annuity are far more complex than the traditional fixed annuity. For any annuity, and especially an equity indexed deferred annuity, a prospective annuitant must understand a number of things about the annuity: (a) the overall product features; (b) investing; (c) tax impacts of the annuity; (d) the projected rates of return and how certain those rates are; (e) the risks associated with the insurance company, or "credit risk"; (f) liquidity of the investment; and (g) fees or costs associated with the annuity. There are several features of deferred annuity products, including equity indexed deferred annuities, which can have adverse consequences for some annuitants: (a) it is far more complex than traditional fixed annuities; (b) the uncertainty of the return on the annuitant's investment; (c) the treatment of income from the annuity as ordinary income rather than capital gains; (d) the treatment for tax purposes to beneficiaries (no stepped-up basis or capital gains); (e) the lack of liquidity and surrender charges; (f) inflexibility in changing or "rebalancing" the mix of assets invested in; and (g) fees associated with the annuity. Count I: The VandenBosch Transactions. In December 2003 Mr. Ripa met with Emil and Georgette VandenBosch at their Boynton Beach, Florida home. Emil was 88 years of age at the time and Georgette was 89 years of age. While the evidence failed to prove their exact net worth, they were retired and of relatively modest means.2 As a consequence of the December 2003 meeting, Mr. Ripa sold a fixed deferred annuity in the amount of $108,900.69, contract number 449001, from American Investors Life Insurance Company (hereinafter referred to as "American Investors")(hereinafter referred to as the "First VandenBosch Annuity"). The annuitant was Georgette VandenBosch. The First VandenBosch Annuity, while allowing up to a 10 percent withdrawal from the annuity, after the first year the annuity was in force, once a year. For any other withdrawal from the annuity the contract provided for a 12 percent, 12-year declining surrender charge. Consequently, in order for the VandenBosches to fully access the annuity without penalty, Ms. VandenBosch would have to live until she was at least 101 years of age. Her life expectancy at the time she purchased the First VandenBosch Annuity was only 5.35 years, a fact that Mr. Ripa knew or should have been aware of. The sale of the First VandenBosch Annuity generated commissions of $7,895.30 for Mr. Ripa or his agency, Fidelity Assurance. In January 2004, Mr. Ripa again met with the VandenBosches, this time selling them a $26,520.11 deferred annuity, half in a traditional fixed annuity and half in an equity indexed annuity, contract number 449729, from American Investors (hereinafter referred to as the "Second VandenBosch Annuity"). The annuitant was Emil VandenBosch. Within four months after purchasing the Second VandenBosch Annuity, Mr. VandenBosch, through Mr. Ripa, invested an additional $22,200.00 into the annuity, for a total investment of $48,620.11. The Second VandenBosch Annuity, while allowing up to a 10 percent withdrawal of the annuity once a year after the first year, provided for a 12 percent, 10-year declining surrender charge for any other withdrawals. Consequently, in order for Mr. VandenBosch to fully access the annuity without penalty, Mr. VandenBosch would have to live until he was at least 99 years of age. His life expectancy at the time he purchased his annuity was only 4.85 years, a fact that Mr. Ripa knew or should have been aware of. The sale of the Second VandenBosch Annuity generated commissions of $4,862.02 for Mr. Ripa or his agency, Fidelity Assurance. It has been the practice of the VandenBosches, that Mr. VandenBosch handled all financial transactions impacting the family. It is, therefore, inferred that Mr. VandenBosch was responsible for the purchase of the First and Second VandenBosch Annuities. While neither Emil nor Georgette VandenBosch testified at the hearing of this matter,3 one of their children, Donald VandenBosch did. While much of his testimony constituted hearsay, not subject to any exception under Chapter 90, Florida Statutes,4 he did testify credibly that Mr. VandenBosch was, at the times relevant to this matter, experiencing declining health. His declining health included macular degeneration, which impacted his eye sight, and a decline in his mental capacity. While the evidence failed to prove clearly and convincingly that Mr. VandenBosch was unable to read the documents involved with the purchase of the First and Second VandenBosch Annuities, it is found that, due to his declining mental capacity and the complexity of the contracts for the annuities, Mr. VandenBosch relied heavily, if not exclusively, on Mr. Ripa's representations concerning the policies Mr. Ripa sold them. In January 2005, the VandenBosches, along with their son, Donald VandenBosch, arranged to meet with Ripa. During that meeting the VandenBosches told Mr. Ripa that they desired to access their investments and needed his assistance to avoid the high penalties associated with withdrawals.5 Mr. Ripa accurately explained that the only way to avoid the surrender penalties and access their investments currently would be to make a once-a-year withdrawal of up to 10 percent of the annuities. After emphasizing to Mr. Ripa that they did not want to incur any penalties, Mr. Ripa was instructed to arrange for them to make a 10 percent withdrawal from the First VandenBosch Annuity, which Mr. Ripa explained would amount to the equivalent of approximately $950.00 to $970.00 per month. At no time during the meeting was their any instruction given to Mr. Ripa to arrange for the cancellation of either of the annuities or the purchase of any other product. Mr. Ripa agreed to prepare the necessary paperwork to carry out the VandenBosches' instructions. The events of the January 2005 meeting support a finding that the First and Second VandenBosch Annuities did not meet the VandenBosches' financial goals and were not suitable investments for them. In particular, it is inferred that the VandenBosches did not want to invest in a product that so severely restricted their access to their assets. Despite the clear instructions to Mr. Ripa concerning the VandenBosches' wishes,6 Mr. Ripa presented the VandenBosches with forms for their execution subsequent to their January 2005 meeting which resulted in the cancellation of the First VandenBosch Annuity and the purchase of a new immediate fixed annuity from American Investors, contract number 473129. As a result of these transactions, the VandenBosches incurred a surrender penalty of $11,301.65, the very result they had explicitly told Mr. Ripa they wished to avoid. The monthly payments received by the VandenBosches through the newly purchased fixed annuity were very close to the amount of money they would have received by taking a penalty- free yearly withdrawal and dividing that amount on a monthly basis. There was, therefore, no apparent reason why the VandenBosches would have incurred the penalty of $11,301.65 imposed upon them for canceling the First VandenBosch Annuity. These transactions were carried out by Mr. Ripa despite instructions to contrary, despite the severe penalty incurred by the VandenBosches, and without any discernable reason. It is, therefore, inferred that Mr. Ripa, at best, simply failed to adequately explain the transactions or, at worst, deceived the VandenBosches into believing the documents he provided for their signature were consistent with their instructions during the January 2005 meeting. Count II: The Tuinstra Transaction. In May of 2004, Gerald Tuinstra met with Mr. Ripa at his Boynton Beach home. Mr. Tuinstra was 83 years of age at the time. His wife, Marcella, was 80 years of age and had recently moved into a nursing home. Mr. Tuinstra contacted Mr. Ripa because he was interested in creating an income source with money he had received from the sale of some property. He wanted to create an income source in order to help with the funding of his wife's nursing home expenses, while avoiding the exhaustion of his limited assets. Additionally, Mr. Tuinstra was interested in protecting his property against possible loss which might be caused by the need to seek government funding for his wife's nursing home costs. At the time of his meeting with Mr. Ripa, the money which Mr. Tuinstra was interested in investing was deposited in a bank where it was earning approximately 4 percent interest. Mr. Tuinstra explained his investment goals to Mr. Ripa during their meeting and Mr. Ripa assured him that both goals could be achieved through products offered by Mr. Ripa. As to the goal of creating an income source, Mr. Ripa told Mr. Tuinstra that he would earn 7.37 percent interest on his investment for the first year and would likely earn more in following years. Mr. Ripa told Mr. Tuinstra that he would receive $391.05 per month, writing this amount on notes he left with Mr. Tuinstra. Mr. Ripa did not inform Mr. Tuinstra that the annuity he was proposing was subject to the risk of earning even less then he was currently earning from his bank account or even earning nothing. Mr. Ripa also assured Mr. Tuinstra that his investment would be protected, meeting his second investment goal. Based upon Mr. Ripa's representations, which were, at best, misleading, Mr. Tuinstra purchased a $40,000.00 equity indexed deferred annuity from American Investors, contract number 458412, recommended by Mr. Ripa (hereinafter referred to as the "Tuinstra Annuity"). Mr. Tuinstra's wife was made the annuitant. The money used to make this purchase constituted substantially all of Mr. Tuinstra's liquid assets. The commission on the sale of the Tuinstra Annuity was $4,200.00. The Tuinstra Annuity provided for a 17 percent surrender charge for the first three years of the contract, declining to a 3 percent charge in the 13th year. Mr. Tuinstra's life expectancy at the time of the purchase was 6.65 years. Mr. Tuinstra was not informed of these provisions of the contract by Mr. Ripa during their meeting. In fact, Mr. Ripa led Mr. Tuinstra to believe that he would be receiving monthly payments throughout the term of the annuity. The Tuinstra Annuity that Mr. Ripa had assured Mr. Tuinstra would provide the monthly income he desired, actually failed to provide for any payment. The only provision for a return of his investment without penalty during the first 13 years of the contract was the allowance of a 10 percent withdrawal, after the first year of the contract, on an annual basis, which was not what Mr. Tuinstra asked for or was told he was limited to. When the actual contract for the Tuinstra Annuity was received by Mr. Tuinstra from American Investors, he read the contract and realized that much of what Mr. Ripa had told him about what he was purchasing was incorrect. He then began making efforts to cancel the policy, which he was ultimately able to do. It was during these efforts that he learned for the first time about the withdrawal penalties, not from reading the rather lengthy contract, but from an unidentified man he spoke to about the contract at Fidelity Assurance. Count III: The Putnam Transaction. In March of 2005, the son of Louis Bruno, who was 90 years of age at the time, was pursuing court proceedings to be appointed Mr. Bruno's guardian. Mr. Bruno was living in Boyton Beach, Florida at the time with his companion of 15 or so years, Irene Putnam. Due to his advanced age and lack of short-term memory, Mr. Bruno was unable to manage his own finances, instead, relying upon Ms. Putnam, who had a power of attorney from Mr. Bruno. Ms. Putnam was 82 years of age at that time. At some time shortly before a hearing was scheduled to be held on the guardianship matter, Ms. Putnam and Mr. Bruno discussed the upcoming proceeding with Mr. Ripa, whom Mr. Bruno and Ms. Putnam had known as a friend for a number of years. Mr. Ripa agreed to testify at the court proceeding on behalf of Mr. Bruno. At some point during their discussion, Mr. Ripa asked Mr. Bruno and Ms. Putnam whether they realized that, if Mr. Bruno lost the court proceeding, his son would have authority over all of his assets, including $18,000.00, which Mr. Bruno maintained in two separate bank accounts. This money represented Mr. Bruno's liquid assets at the time. The possibility of losing control of his money was not something that Mr. Bruno or Ms. Putnam had considered and, in response to Mr. Ripa's warning, they asked him if he knew how they could avoid this result. Mr. Ripa told Mr. Bruno and Ms. Putnam that he knew how the money could be protected until after the proceeding. They unequivocally explained to Mr. Ripa that they did want to protect the money, but for only a short period of time. Their intent, which was fully explained to Mr. Ripa, was to re-take possession of the money immediately after the guardianship proceeding ended, in which they expected to prevail. Instead of carrying out Mr. Bruno's clear, unequivocal goal, Mr. Ripa, no more than two or three days before the March 2005 guardian proceeding, sold Mr. Bruno an $18,000.00 equity indexed deferred annuity from American Investors, contract number 476076, with Ms. Putnam as the annuitant7 (hereinafter the "Putnam Annuity"). The Putnam Annuity provided for penalties for withdrawal of the annuity during the first 10 years of the contract, starting at 12 percent during the first year and declining thereafter. Ms. Putnam, whose life expectancy was 8.45 years, would have had to survive to age 92 in order to withdraw the full annuity without penalty. Mr. Bruno would have had to live to age 100 to do so. The commission on the sale of the Putnam Annuity was $1,800.00. Following Mr. Bruno's successful defense of the guardianship proceeding, Ms. Putnam spoke to Mr. Ripa about the retrieval of the $18,000.00 investment. Having received the actual contract, however, Ms. Putnam realized that the Putnam Annuity was not what Mr. Bruno and she had believed they were purchasing. Indeed, having relied totally on Mr. Ripa to protect Mr. Bruno's money for a very short time, including allowing him to complete all of the paperwork for them, she had not even realized that Mr. Bruno had purchased an annuity of any kind prior to receiving the contract. In response to her inquiry, Mr. Ripa suggested that Ms. Putnam have Mr. Bruno surrender another annuity which he owned, one without surrender charges, thereby obtaining cash for his immediate needs and avoiding any surrender charges on the Putnam Annuity. While this suggestion would have allowed Mr. Bruno to replace the $18,000.00 he had tied up in the Putnam Annuity, it was not an option that had ever been discussed with Mr. Bruno or Ms. Putnam and was contrary to what they had requested that Mr. Ripa do with the $18,000.00. Count IV: The LaValley Transactions. In September 2005, Mr. Ripa met with Virginia LaValley at her Boyton Beach, Florida home. Ms. LaValley, who lived alone, was 75 years of age at the time. Ms. LaValley had been evidencing signs of dementia as early as 2003, and her symptoms had continued to increase up to the time Mr. Ripa met with her.8 She had begun to have difficulty remembering simple words to describe objects as early as 2003. During 2005 (prior to September), she had expressed the belief that a computer-generated form letter had been personally written to her; she had begun piling her mail on the dining room table rather than deal with it; she believed that she would "go to jail" if she threw out any of the mail sent to her; she had sealed return envelopes from solicitations she had received and written words to the effect that she would not mail them until the addressees provided her with stamps, a demand that the addressees could not be aware of without the letters being mailed to them, a fact that Ms. LaValley did not understand; and she had stopped reconciling her checkbook or otherwise keeping up with her personal finances.9 Janet Yocum, a friend and an individual who had sold annuities to Ms. LaValley in the 1990's, noticed as early as 2003 that Ms. LaValley was having difficulty following simple instructions concerning the completion and return of a form that Ms. Yocum had sent to Ms. LaValley. It was obvious to Ms. Yocum, although she did not see Ms. LaValley on a regular basis, that Ms. LaValley was losing her ability to understand even simple matters long before Mr. Ripa's meeting with Ms. LaValley. While Mr. Ripa was not aware of some of the foregoing events, it is found that Ms. LaValley's state of health in September 2005 should have been evident to Mr. Ripa when he met with her. If nothing else, Mr. Ripa should have realized that Ms. LaValley was not capable of understanding the complexities of fixed annuity contracts, much less equity indexed deferred annuity contracts. Despite what must have been obvious to him, Mr. Ripa convinced Ms. LaValley during his September 2005 meeting to surrender six annuities which she had purchased from Jackson National Life Insurance Company (hereinafter referred to as "Jackson National") between 1993 and 1997. Mr. Ripa also convinced Ms. LaValley to use the proceeds from the Jackson National annuities, which were old enough to avoid any surrender charges for their surrender and provided for a minimum return of at least 3 percent, to purchase two American Investors annuities (hereinafter referred to jointly as the "LaValley Annuities"). One of the LaValley Annuities, contract number 499901, was an equity indexed deferred annuity for which Ms. LaValley paid $19,500.00. The other, contract number 500794, was also an equity indexed deferred annuity in the amount of $19,079.49. Both provided surrender penalties over 15 years, with a penalty for the first year of 19 percent. Ms. LaValley, whose life expectancy at the time was 12.6 years, would have to live until she was 91 years of age to avoid any surrender penalty. The minimum interest on the annuities was 2 percent compared to the minimum 3 percent rate of the Jackson National policies. During his meeting with Ms. LaValley, Mr. Ripa gave her a company brochure from American Investors' parent, "Amerus." There were a number of handwritten notations on the brochure written by Mr. Ripa. One notation indicates "7%" and is followed by Mr. Ripa's initials. Next the heading "Fixed Strategy" is the notation "3%." While there was no evidence explaining what was said about these notations, they all emphasize "positive" aspects or selling points for the annuity products sold to Ms. LaValley. What Ms. LaValley took from the meeting and, likely, the notations, is that she would be earning 7 percent each year on the LaValley Annuities.10 As further evidence of her declining mental state, when Ms. LaValley received a letter from American Investors' parent company within two weeks after purchasing the LaValley Annuities congratulating her on her purchases. Ms. LaValley, apparently not realizing what the letter meant, wrote a note dated "10/4/200[5]"11 on it stating that "I do not want American Investors Life. Please Cancel." Her signature followed this note. This letter, with her handwritten reply, was returned to American Investors. Whether Ms. LaValley intended to "cancel" the LaValley Annuities or simply thought the letter was a solicitation to purchase insurance is not clear. If the former, she clearly evidenced intent to cancel the LaValley Annuities; if the latter, she evidenced a lack of understanding about what she had done only two weeks before. American Investors apparently treated Ms. LaValley's instructions literally as evidence of her intent to cancel the LaValley Policies, apparently informing Mr. Ripa. Mr. Ripa then revisited Ms. LaValley and prepared a letter for her signature repudiating her attempt to cancel the annuities. The letter, Petitioner's Exhibit 10, was faxed from Fidelity Assurance's fax machine on October 13, 2005. The Unsuitability of the VandenBosch, Tuinstra, Putnam and LaValley Annuities. Given the ages of the annuitants at the time of the purchase of the various annuities at issue in this case (all except one of which were equity indexed deferred annuities; the other was a deferred fixed annuity), their relatively modest financial situations, the long-term nature of the annuities and the high penalties associated with accessing their investments should the need arise (all of the individuals involved would have had to outlive their life expectancies in order to access their investments without penalty), the VandenBosch Annuities, the Tuinstra Annuity, the Putnam Annuity, and the LaValley Annuities were not suitable investments for those individuals, a fact which Mr. Ripa knew or should have known. The foregoing conclusion is also supported by the VandenBosches' efforts not too long after purchasing their annuities to unsuccessfully access their investments and their expression of disappointment upon learning of the severe withdrawal penalties associated with accessing their investments; Mr. Tuinstra's explanation of his intended investment goals when he purchased his annuity and the failure of the Tuinstra Annuity to meet those goals; Ms. Putnam's and Mr. Bruno's explanation of their intended short-term investment goal when the Putnam Annuity was purchased and the failure of the Putnam Annuity to meet that goal; and Ms. LaValley's obvious impaired ability to understand the nature of the transactions carried out by Mr. Ripa, transactions that make no sense from a financial point of view. Finally, the conclusion that the investments at issue in this case were sold to inappropriate purchasers is based upon the obvious failure of Mr. Ripa to perform a basic suitability analysis at the time he sold the annuities to the any of the individual involved or, if he did perform such an analysis, his failure to recognize that the annuities were not a suitable investment for those individuals. The VandenBosches, the Tuinstras, Ms. Putnam and Mr. Bruno, and Ms. LaValley were all individuals of somewhat advanced age and modest financial resources. It is hard to imagine how Mr. Ripa could have performed the type of financial risk analysis he should have performed for these individuals and still concluded that the annuities sold to them were appropriate. None of the individuals were looking for such long-term investments and it was proved that some expressed interest in short-term investments or investments that would create an immediate income stream: the VandenBosches expressed their desire for a return of their funds shortly after Mr. Ripa sold them their annuities; Mr. Tuinstra testified convincingly of his desired investment outcome (income producing and asset protection); and Ms. Putnam testified convincingly that she and Mr. Bruno only wanted to protect his funds for a few weeks. Despite these known goals, Mr. Ripa sold the VandenBosches, the Tuinstras, and Ms. Putnam and Mr. Bruno a product which did nothing but thwart those goals. Jurisdiction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Joseph John Ripa violated the provisions of Chapter 626, Florida Statutes, described, supra, requiring that he pay an administrative fine of $40,000.00 and revoking his licensure as a life and health agent. DONE AND ENTERED this 16th day of May, 2007, in Tallahassee, Leon County, Florida. S LARRY J. SARTIN 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 16th day of May, 2007.
The Issue Should Respondent's license as a real estate broker be revoked, suspended or otherwise disciplined?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency charged with the responsibility of investigating and enforcing the provisions of Chapter 475, Florida Statutes. At all times material to this proceeding, Respondent was a licensed real estate broker in the State of Florida, issued license number 0152815 in accordance with Chapter 475, Florida Statutes. Robert L. Purlee and Doris A. Purlee (Purlees) conveyed certain real property located at Unit 1303-A, Jamestown Condominiums, within Pinellas County, Florida, to Ralph F. Marotte and Eve K. Marotte (Marottes), on June 18, 1993, for an agreed upon sum of $15,000, with installments due over a period of 120 months, at the rate of $181,99 per month, beginning July 15, 1993. Since there was no express language in the deed to express a contrary intent, the conveyance to the Marottes created an estate by the entirety which was not available to answer for the individual debts of either of the tenants. The Marottes executed a mortgage and ad promissory note creating a lien against the property in favor of the Purlees, to secure the timely payment of the sum owed by the Marottes. At the time the Marottes purchased the property in question from the Purlees, there were no other liens or encumbrances against the property. At the time the deed was recorded, there was two personal judgments filed of record against Ralph F. Marotte, individually, but no personal judgments filed of record against Ralph F. Marotte and Eve K. Marotte, jointly or as husband and wife, or Eve K. Marotte, individually. Since no copies of these judgments, certified or otherwise, were introduced as evidence, and David Eaton appeared to be confused about these judgments, this finding is based on the testimony of Eve K. Marotte which I find credible. On November 10, 1993, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: We are unable to financially own this unit, therefore, we wish to deed it back to you and your wife, and record it in the courthouse. Rather than go thru foreclosure proceedings and lawyer’s fees etc., thought the simplest best way for both of us is to just return the property back to you both, and have the tenant send her rent payment directly to you. We have prepared the deed - and after it is recorded - have the courthouse send it to you directly. (Emphasis Supplied) * * * On December 8, 1993, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: Attached is a copy of the Quit Claim Deed - which is being recorded and will be mailed to you directly. (Emphasis Supplied) * * * On January 6, 1994, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: We went to the courthouse to record the deed, and realized that we did not take the mortgage off, so we are enclosing a satisfaction of mortgage, so that we can turn the property back to you- and you will then own it free and clear as you did before. As soon as we received this paper from you, will turn over everything, to you, that is, keys, etc. (Inventory remains the same). (Emphasis Supplied) * * * From the notation on the quit claim deed it appears that the Marottes attempted to record the deed at the courthouse but changed their mind as indicated in the letter. The Purlees executed the satisfaction of mortgage and posted it with the United States Postal Service for delivery to the Marottes. Subsequently, the Purlees discussed the matter with their attorney, David A. Eaton, who advised the Purlees to have the satisfaction of mortgage retrieved from the postal service. This was accomplished, and the Marottes did not receive the satisfaction of mortgage. Therefore, the Marottes did not record the quit claim deed transferring title back to the Purlees. Based on the testimony of Eve K. Marotte which I find credible, Eve K. Marotte continued in her effort to deed the property back to the Purlees, and even discussed the possibility of satisfying the personal judgments against Ralph F. Marotte in the process. In fact, Respondent even arranged for the sale of the property but that did not prove fruitful either. At the time the Marottes attempted to deed the property back to the Purlees, the Marottes did not advise the Purlees of the personal judgments against Ralph F. Marotte, individually. Since the conveyance of the property to the Marottes created an estate by the entirety, the property would not have been subject to any judgments against Ralph F. Marotte, individually upon the Marottes deeding the property back to the Purlees. There was no intent on the part of the Respondent to “saddle” the Purlees with Ralph F. Marotte’s personal judgments. Likewise, there was no intent on the part of Respondent to mislead or misrepresent the circumstances surrounding the attempt to “deed back” the property or to induce the Purlees to execute a satisfaction of mortgage so that the Marottes could record such satisfaction or mortgage without recording the quit claim deed and thereby have the property free and clear of the mortgage. Although the Marottes did make some of the mortgage payments, they did not make all of the payments as contemplated by the mortgage and promissory note. Their failure to make mortgage payments was due to their financial condition and not that the Marottes were intentionally attempting to deprive the Purlees of the property without paying for the property. The Marottes collected some rent from the property but apparently did not apply this money toward the mortgage payment. However, there was no evidence, other than the requirement of making the mortgage payments, that the Marottes were required to pay the rent over to the Purlees. On or about November 6. 1995, the Purlees filed a complaint with the Circuit Court of the Sixth Judicial Circuit of the State of Florida, in and for Pinellas County, against the Marottes alleging, inter alia, that Respondent committed fraud and dishonest dealing in a real estate transaction. On a Motion for Summary Judgment filed by the Purlees, the court entered a Final Judgment Against Licensed Real Estate Broker, Eve K. Marotte, for Monetary Damages Arising Out of Fraudulent Conduct in a Real Estate Brokerage Transaction on March 1, 1996. Additionally, the court entered a Final Judgment Against Eve K. Marotte and Ralph F. Marotte for the total sum of $95, 454.95 which included $22, 284.54 in actual damages, $66,853.62 in trouble damages pursuant to Section 772.11, Florida Statutes, $5,250.00 in attorney’s fees, and $1,066.79 in taxable costs. Because of this judgment and other financial and personal circumstances surrounding the Respondent’s life at that time, the Respondent filed for bankruptcy which eventually “wiped out” this judgment. Subsequently, the Purlees filed a separate proceeding for foreclosure of the mortgage, and obtained title to the property by foreclosure sale on or about August 1997. Between the time of the initiation of the foreclosure proceeding and gaining title to the property, the Purlees had a receiver appointed to receive the rent on the property. Although David Eaton testified that the Marottes failed to turn over rents during this period, there is insufficient evidence to show that the Marottes received any rent during this period or that the property was rented at all times during this period. Clearly, after engaging an attorney and obtaining the large judgment, the Purlees were not interested in taking the property back without the judgment being satisfied. Likewise, it is equally clear that Respondent was not financially able to pay the judgment. Respondent did not intentionally or otherwise misrepresent the facts in order to induce the Purlees to accept the deed back and release her from her obligation, or act in a fraudulent manner in order to convince the Purlees to release Respondent from her obligation, or act dishonestly in her dealings with the Purlees.
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 both Count I and Count II of the Administrative Complaint. DONE AND ENTERED this 19th day of December, 1997, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1997. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda Goodgame General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Geofrrey T. Kirk, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite N-308 Orlando, Florida 32801 Eve K. Marotte, pro se 2616 46th Terrace North St. Petersburg, Florida 33714
