The Issue Whether or not Petitioner Robert R. Hambley is entitled to an award of attorney's fees pursuant to Section 57.111, Florida Statutes.
Findings Of Fact This case arises in the wake of Robert R. Hambley v. Department of Professional Regulation, DOAH Case No. 88-4788, for formal administrative proceeding stemming from a complaint filed against Petitioner on September 28, 1987. On July 5, 1989, the undersigned Hearing Officer entered a Recommended Order imposing an administrative fine against the Petitioner in the amount of $1,000.00 and placing the Petitioner's license on probation for a period of one (1) year. Petitioner did not file exceptions to the subject recommended order. On August 22, 1989, the Respondent, Department of Professional Regulation, Division of Real Estate, rejected the proposed order and revoked the Respondent's license. Thereafter, Petitioner retained the services of the law firm of LARSON, CONKLIN, STANLEY, PROBST & BOBENHAUSEN, P.A. to represent him, which attorney's filed an appeal in the Second District Court of Appeal contesting the Division of Real Estate's Final Order, specifically the aggravation of the penalty, to wit, revocation of Petitioner's license. In connection with Petitioner's legal representation, he incurred reasonable costs and fees in the amount of $504.49 and $3,393.00, respectively. On October 5, 1990, the Second District Court of Appeal entered its order affirming the findings as found by Recommended Order, but reversed and remanded for implementation of the recommended penalty of $1000.00 and rejecting the recommended penalty of probation, since that was not an authorized penalty at the time of the hearing. The basis of the Court's decision is that Respondent failed to adequately comply with Section 120.57(1)(b)(10), Florida Statutes, in order to properly increase the severity of the recommended penalty. See Bernal v. Department of Professional Regulation, 517 So.2d 113, (Fla. 3d DCA 1987), affirmed 531 So.2d 967 (Fla. 1988). Thereafter, on October 10, 1990, the Respondent filed a motion for rehearing which motion was denied on November 1, 1990. On November 11, 1990, a Mandate issued from the Second District Court of Appeal and Petitioner's license was reinstated on November 21, 1990, with Respondent issuing a Final Order rescinding its prior order of August 15, 1989, and by issuing a supplemental Final Order on December 4, 1990. That December 4, 1990, order implemented the recommended penalty with the exception of probation which was not statutorily authorized. The Administrative Complaint which was filed jointly against Petitioner was a six count administrative complaint and the entity through which he dealt, Real Pro Associates, Inc. Petitioner was found guilty of participating in five transactions which conduct amounted to proscribed conduct within the purview of Subsection 475.25(1)(a), Florida Statutes, by paying real estate commissions totaling over $28,500.00 to Paul George, an unlicensed person. Petitioner was also found guilty of culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes, for having failed to inform or otherwise disclose to Stewart Fidelity Title Company, the company which handled the closing for the transactions, that the stated escrow deposits were never placed in an escrow account as represented in the contracts for sale and purchase which would alert the lender that the purported purchaser had a "no equity" position in the purchases. Petitioner was, via Recommended Order, required to pay an administrative fine of $1,000.00 within thirty (30) days of the entry of the Final Order. Petitioner was found guilty of all violations for which he was cited in the Administrative Complaint filed by Respondent and a monetary penalty was imposed. Respondent was substantially justified in asserting that the Petitioner was in violation of the real estate licensing law when it issued the subject complaint. That proceeding was premised on a reasonable basis in law and fact when it was initiated. See Miller v. Department of Professional Regulation, Division of Real Estate, DOAH Case No. 89-5042F, 12 FALR 2312, 2314 filed 5/16/90. The Florida Real Estate Commission enhanced the penalty to recommendations which were within the parameters set forth in the disciplinary guidelines of the Florida Real Estate Commission as provided for by Rule Sections 21V-24.001(2) and (3), Florida Administrative Code. The rule sections provided that the Petitioner Hambley could have been fined, for such violations, up to $1,000.00 per count and may have had all his licenses, registrations, certifications and permits penalized as follows: (h) 475.25(1)(b) - Up to 5 years suspension or revocation. [Emphasis supplied] (n) 475.25(1)(h) - Up to 2 years suspension. Petitioner has not demonstrated that it was a prevailing small business party under Section 57.111, Florida Statutes. Moreover, the actions of the Florida Division of Real Estate were substantially justified as defined by Subsection 57.111(3)(e), Florida Statutes. This is borne out by the findings as found by the undersigned Hearing Officer, which provides both a reasonable basis in law and fact as well as substantial justification of the administrative action when it was initiated. Particularly, the complaint against Petitioner was reviewed by a probable cause panel on September 15, 1987. That material which was reviewed by the panel included an investigative report and documentary evidence, all of which was presented to the panel and ultimately to the undersigned Hearing Officer. Appended to the investigative report was some 30 pages of exhibits which provided an adequate basis to support the charges of culpable negligence and breach of trust in a business transaction.
Findings Of Fact By Administrative Complaint filed August 30, 1990, and assigned DOAH Case No. 90-6107, Respondent alleged that Petitioner, as a licensed auction business, accepted the consignment of property from Ms. Erma Grant in April, 1988. The Administrative Complaint alleges that Petitioner failed to provide Ms. Grant a written agreement evidencing the consignment, as required by Section 468.388 for consignments involving property whose estimated value is over $500. The Administrative Complaint alleges that Petitioner failed to pay Ms. Grant the auction proceeds within 30 days of the auction. Based on the factual allegations set forth above, the Administrative Complaint charges that Petitioner violated Section 468.389(1)(j), which prohibits a violation of any statute, through the violation of Section 468.388 by failing to obtain a written consignment agreement; Section 468.389(1)(c), which prohibits the failure to account for or to pay, within a reasonable time not to exceed 30 days, money belonging to another which has come into the control of an auctioneer or auction business through an auction; and Section 468.389(1)(e), which prohibits conduct in connection with a sales transaction which demonstrates bad faith or dishonesty. Based on the alleged violations set forth above,the Administrative Complaint requests the Board of Auctioneers to enter a final order revoking or suspending Petitioner's license, imposing an administrative fine, issuing a reprimand, placing Petitioner on probation, and awarding other appropriate relief. Respondent predicated its allegations largely on a complaint that it received from Ms. Grant. By letter dated April 23, 1990, Ms. Grant recounted that she had advertised a moving sale in March or April, 1988. She reported that Petitioner contacted her and asked that she let him take everything to sell at an auction. Following the sale, she stated that she called Petitioner and consigned to him several items, including a davenport, china cabinet, a still- life picture, and two padded chairs. Ms. Grant charged in her letter that she did not hear from Petitioner following the consignment. Residing in Vermont, she returned to Florida in November, 1988, and immediately contacted Petitioner. She charged that Petitioner explained that he did not have the money, but thought that he had sent her a check. He reportedly promised to examine his records. Ms. Grant letter states that Ms. Grant returned to see Petitioner on March 6, 1989. The letter reads: "[Petitioner] had already told a cousin of mine that he had sent a check to me for $227. Some of my boys must have cashed it on me." It is unclear to whose "boys" the letter refers. Ms. Grant continued to pressure Petitioner for payment, according to the April 23 letter, but Petitioner refused to pay or show herrecords that he had already sent a check. Ms. Grant alleged that on April 11, 1989, Petitioner offered her $100. About a week later, Petitioner told her that he would be sending her a check for $50 and allegedly admitted that he had no copy of any prior check. Ms. Grant, who was 75 years old at the time and had recently been in poor health, ended her letter with a request for assistance and provided Respondent with her address in Vermont, to which she was returning in the next few days. Respondent opened a formal investigation shortly after receiving Ms. Grant's complaint. On June 4, 1990, Respondent's investigator contacted Ms. Grant, who stated that she had still not received anything from Petitioner. The following day, the investigator contacted Petitioner, who said that he could not remember accepting any property from Ms. Grant on consignment. They set up an appointment for June 6. On June 6, Ms. Grant telephoned the investigator and informed him that a friend of hers in Cocoa, Mr. Alcide Quesnel, had received a call from Petitioner, who offered him the sum of $200 to send to Ms. Grant. The investigator contacted Mr. Quesnel on the same day, and he confirmed that he had received from Petitioner the sum of $200 the prior evening to send to Ms. Grant. Mr. Quesnel explained that he had introduced Ms. Grant to Petitioner. Mr. Quesnel later tried to change his story by telling the investigator that Petitioner did not give him themoney. Instead, someone unknown to him put the money in his pocket and he assumed that it was for Ms. Grant because he had known that she and Petitioner had been having some problems. By letter dated June 9, 1990, Ms. Grant provided Respondent's investigator with a copy of the $200 check that she had received from Mr. Quesnel. She added that Mr. Quesnel had telephoned her on the evening of June 5 and informed her that Petitioner had given him the $200, she was to call the investigator and tell him that she had received the money, and Petitioner did not want a receipt. In addition to the interviews of Ms. Grant, Petitioner, and Mr. Quesnel, the investigator received an affidavit from Ms. Grant's sister, who swore that she witnessed Petitioner pick up the furniture from Ms. Grant's house in April, 1988. By internal memorandum dated December 31, 1990, a law clerk of Respondent advised the attorney handling DOAH Case No. 90-6107 that she did not believe that Respondent could prove by clear and convincing evidence that Petitioner was guilty of any violations of Chapter 468. Respondent served the Notice of Voluntary Dismissal the same day. Pursuant to the parties' stipulation, Respondent is a state agency and initiated the underlying case giving rise to the present claim for attorneys' fees; Petitioner is a prevailing small business party; and the attorneys's fees and costs are reasonable as to those expended in connection with theunderlying case. The fees in connection with DOAH Case No. 90-6107 are $1920. There is no indication that Petitioner incurred any costs in connection with DOAH Case No. 90-6107.
The Issue The issue is whether Petitioners' applications for reimbursement from the Securities Guaranty Fund should be approved.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: These cases involve claims by Petitioners, Clyde and Patti Gallo (Case No. 98-3765) and Richard and Belinda Morin (Case No. 98-3766), for payment from the Securities Guaranty Fund (Fund) for monetary damages suffered as a result of violations of the Florida Securities and Investor Protection Act by William Anthony McClure (McClure). When the violations occurred, McClure was a registered associated person employed by Schneider Securities, Inc. (Schneider), a Colorado corporation registered as a securities dealer in the State of Florida. The Fund is administered by Respondent, Department of Banking and Finance (Department), which must approve all applications for payment from the fund. Undisputed Facts Regarding the Gallo's Claim McClure served as manager for Schneider's branch office in Gainesville, Florida. On February 26, 1993, the Gallos deposited the sum of $213,978.10 with Schneider to open an account for investment purposes. McClure executed a Letter of Authorization dated March 18, 1993, for the transfer of $30,000.00 from the Gallo's brokerage account without the Gallo's authority. This money was then transferred to Buddy Miller, who paid McClure $5,000.00 for the delivery of the money. McClure subsequently obtained ratification of the transfer of monies from the Gallo's account by representing to Mr. Gallo that the transaction was a "factoring arrangement" and that the investment of monies would be "secure." McClure made the foregoing representations at a time when he knew that Miller was insolvent, that he was paying him a kickback, and that the money had already been transferred from the Gallo's account. McClure did not disclose this information to the Gallos. The Gallos lost the entire $30,000.00 appropriated by McClure from their account with Schneider. In February 1995, the Gallos filed a five-count complaint with the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make restitution within 30 days from receipt of notice in order to avoid liability for treble damages. In April 1996, the Gallos received the sum of $40,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On August 19, 1996, an Amended Final Judgment awarded the Gallos the sum of $30,000.00 in compensatory damages. This amount was then trebled to $90,000.00 pursuant to Section 772.11, Florida Statutes. The Amended Final Judgment subtracted the sum of $40,000.00 received from Schneider from the $90,000.00 in trebled damages for a total of $50,000.00 plus statutory interest of $9,999.00, or a total of $59,999.00 against McClure. On December 4, 1996, a Final Judgment awarded the Gallos the sum of $20,878.50 in attorney's fees and the sum of $1,312.06 in court costs against McClure. The parties agree that these amounts are not recoverable from the Fund. On July 11, 1998, the Gallos submitted a claim to the Department seeking to recover $10,000.00 of the treble damages they were awarded pursuant to Section 772.11, Florida Statutes. This claim was denied by the Department on July 28, 1998, on the ground that a claimant cannot recover treble damages from the Fund. Undisputed Facts Regarding the Morin Claim In January 1993, Richard and Belinda Morin deposited the sum of $231,862.59 with Schneider to open an account for investment purposes. McClure was the account executive for Schneider who handled the Morin's brokerage account. In mid-March 1993, McClure contacted Mr. Morin to suggest an investment that he represented as being "secure" and "short-term." McClure described the investment to Morin as a "factoring security" of an account receivable of a major manufacturing concern that was secured by the guaranteed payment of the invoice. The investment suggested by McClure to Morin was really an unsecured loan to a small outdoor furniture manufacturer in Central Florida known as Cypress Originals (Cypress). Cypress was then in severe financial distress which fact was not disclosed to Morin by McClure. On March 5, 1993, or prior to the above discussion, McClure had forged Morin's signature on a Letter of Authorization for the transfer of $25,000.00 from the Morin's brokerage account with Schneider and forwarded the money to Cypress. In June 1993, McClure appropriated an additional $20,000.00 from the Morin's brokerage account into his own personal account or to an account owned and controlled by him. The Morins lost the entire $45,000.00 appropriated from their account. In February 1995, the Morins filed a five-count complaint in the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make any restitution within thirty days after receipt of the notice in order to avoid liability for treble damages. In February 1997, the Morins received $45,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On July 2, 1997, the Morins were awarded the sum of $45,000.00 in compensatory damages. This amount was trebled to $135,000.00 pursuant to Section 772.11, Florida Statutes. The Final Judgment awarded the Morins the sum of $90,000 ($135,000.00 in trebled damages less $45,000.00 received from Schneider), prejudgment interest of $48,397.20, court costs of $9,001.67, and attorney's fees of $32,410.00 against McClure. The parties agree that the court costs and attorney's fees are not recoverable from the Fund. On June 11, 1998, the Morins submitted a claim with the Department seeking to recover $10,000.00 of the prejudgment interest award. On July 28, 1998, the Department issued its proposed agency action denying the claim on the ground that prejudgment interest cannot be recovered from the Fund. The Department's Interpretation and Practice The Department interprets the term "actual or compensatory damages," as used in Section 517.141(1), Florida Statutes, to mean only the principal amount of the loss by the investor. The Department has never approved a claim against the Fund for any damages other than the actual loss of principal. Under the Department's interpretation of "actual or compensatory damages," prejudgment interest and trebled damages would be excluded from being recovered from the Fund.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance enter a Final Order denying the applications of Clyde and Patti Gallo and Richard and Belinda Morin for reimbursement from the Securities Guaranty Fund. DONE AND ENTERED this 22nd day of February, 1999, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 22nd day of February, 1999. COPIES FURNISHED: Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Steven D. Spivy, Esquire 230 Northeast 25th Avenue Suite 200 Ocala, Florida 34470-7075 Margaret S. Karniewicz, Esquire Department of Banking and Finance Suite 526, Fletcher Building Tallahassee, Florida 32399-0350 Harry L. Hooper, III, General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350
The Issue The issue in this case is whether Petitioner's real estate broker's license application should be approved or denied.
Findings Of Fact Petitioner, Rhonda S. Dietz, is a 36-year-old woman who currently holds a real estate sales associate's license. She was first licensed by the State of Florida in December 2001 and has held her license in good standing since that time. At the time Petitioner obtained her sales associate license, she disclosed in her application that she had a criminal background. That background included two grand larcenies, possession of a controlled substance, failure to appear, violation of probation, and obtaining property with a worthless check. Each of the offenses will be further discussed below. Despite the criminal history, Respondent approved Petitioner's sales associate's license, and Petitioner has been selling real estate for the past six years. In 2006, Petitioner first applied for a real estate broker's license. Petitioner maintains that in her 2006 application, she disclosed each of the aforementioned events in her criminal history.1 Nonetheless, her application was denied. In May 2007, Petitioner again filed an application for a real estate broker's license. That application clearly contained documentary evidence of her entire criminal history. The events in that history are hereby discussed: The first grand larceny in Petitioner's background was related to the purchase of goods from a K-Mart in 1994 with a bad check belonging to a roommate. Upon discovering the check was bad, Petitioner immediately turned herself in, made restitution, and paid court costs. She was sentenced to five years' probation for that charge. The second grand larceny involved allegations in 1994 by Petitioner's then-current roommates that Petitioner stole property from them when she moved out of the residence. Although Petitioner denied the charge because the claim was merely retaliation by her roommates for moving out, she agreed to a plea bargain at the advice of counsel. Again, she was given five years' probation and made to pay restitution. In 1998, Petitioner was charged with possession of a controlled substance: a vial of testosterone and some pain pills. She explained that these drugs came from a pharmacy where she was working. The pharmacy specialized in treatment of AIDS patients. She had the drugs in her possession so she could turn them over to a medical group that could disperse them to AIDS patients. The pharmacy supported Petitioner and paid for her defense against the possession charge. Petitioner was sentenced to 24 months' probation, court costs, and 50 hours of community service for that charge. Petitioner also had a probation violation in 1998 for failing to appear and for failing to pay a fine related to one of the aforementioned charges. She did not pay the fine due to lack of funds. She failed to appear due to lack of notice. She was placed on ten months' house arrest for the violation of probation. Petitioner met all other conditions of her probation and has not had any criminal activity since the charges listed above. She does not deny the existence of her prior criminal history and has not attempted to hide it from Respondent. When Petitioner applied for a broker's license in 2005, she filed an application that included her criminal history. The application disclosed all of the charges addressed above. Respondent confirmed the charges by referring to a Florida Department of Law Enforcement (FDLE) report. When Petitioner re-applied in 2007, she personally obtained a FDLE report on her criminal background, which she submitted along with her application. Again, she listed all of her prior history in the application. There is no competent evidence to suggest otherwise. Since the time of her last criminal charge, Petitioner has been gainfully employed. She has worked in an office doing medical billing, in a pharmacy, and as a real estate agent. In her current position, she has been entrusted with large sums of money for clients. She has had no adverse employment actions taken against her. Her co-workers state that she has good moral character and is trustworthy. Petitioner has passed the classroom work needed to become a broker; her application for licensure will complete that process. Meanwhile, she continues to sell real estate and is involved in an investor monitoring program. The broker's license will simply allow Petitioner to make a career move by expanding her capabilities in the area of real estate sales. Respondent did not call any witnesses at the final hearing and did not refute or rebut the facts as stated by Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission granting Petitioner's application for a real estate broker's license. DONE AND ENTERED this 17th day of October, 2007, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 17th day of October, 2007.
The Issue The issue for determination is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by the State of Florida as a real estate broker, having been issued license number 0521991. Respondent's last license issued was as a broker c/o Stellings Realty, Inc., 2368 Saratoga Bay Drive, West Palm Beach, Florida. Beginning on or about March 1, 1998, until August 31, 1998, Respondent had an Exclusive Right of Sale Listing Agreement (Agreement) with Judy Cominse (Seller) for real property, owned by the Seller, located at 4397-B Woodstock Drive, West Palm Beach, Florida. Respondent represented the Seller as a transaction broker and owed her certain duties pursuant thereto. A Brokerage Relationship Disclosure statement was provided to the Seller by Respondent. Another broker, Robert Berman, was the referring agent and was personally known by the Seller. Respondent was of the opinion that Berman was to receive a referral fee of 25 per cent in the event of a sale. The listing was problematic for Respondent. Respondent encountered problems due to restrictions placed on the showing of the property by the Seller and her tenants, who were the Seller's son and daughter-in-law. Respondent contemplated not continuing with the listing. He even mentioned discontinuing the listing with the Seller, but he did not discontinue it. A contract for sale of the Seller's property was entered into by the Seller and Evelyn Swinton (Buyer Swinton). Buyer Swinton signed the contract on June 1, 1998, and the Seller signed it on June 3, 1998. The contract provided, among other things, for an escrow deposit of $1,500 to be held by Sun Title, located in Lake Worth, Florida. The $1,500 was paid and held in escrow by Sun Title. The transaction for the sale of Seller's property failed to close. By a Release and Cancellation of Contract for Sale and Purchase form (Release and Cancellation) dated July 28, 1998,1 both the Seller and Buyer Swinton agreed, among other things, that the $1,500 escrow deposit would be disbursed to the Seller. On July 30, 1998, Sun Title prepared an escrow check in the amount of $1,500, made payable solely to the Seller. The check was forwarded to Respondent sometime after July 30, 1998; the evidence presented was insufficient to show when Sun Title forwarded the check to Respondent.2 On August 6, 1998, Respondent prepared an addendum (Respondent's Addendum) to the Agreement that he had with the Seller. Respondent's Addendum was dated and signed by Respondent on this same date. Respondent's Addendum provided, among other things, the following: This contract [Agreement] will be extended from August 31, 1998 until March 1, 1999; if necessary.3 * * * Stellings Realty, Inc. will receive 7% of the total purchase price. In addition 25% commission of the listing side will be given to Berman Realty as a referral fee. If the Seller should cancel this listing the cancelation fee would be $1000.00. Judy Cominse [Seller] will receive $1500.00 by mail upon acceptance. Paragraph numbered 5 of Respondent's Addendum indicates that, upon the Seller accepting Respondent's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. The Seller did not accept Respondent's Addendum although the Seller was of the opinion that the only way for her to obtain the $1,500 was to agree to an addendum to the contract that she had with Respondent. With the assistance of her sister, who was a licensee, licensed by Petitioner,4 the Seller negotiated a change of terms to Respondent's Addendum. The seller prepared and executed an addendum (Seller's Addendum) on August 6, 1998, and forwarded it to Respondent. The Seller's Addendum provided, among other things, the following: This listing agreement [Agreement] will be extended six months (i.e., from August 31, 1998 until February 28, 1999). * * * Stellings Realty, Inc. will receive 7% of the total selling price (if sold at full listing price), otherwise negotiable; however, no lower than 6%. Additionally, $533.75 to the listing agency (Stellings Realty), which amount will not be subject to the referral fee due and payable to Robert A. Berman Real Estate, the referring broker to the listing agency. If the seller should cancel this listing, the cancellation fee would be $788.75 ($250.00 cancellation fee, plus $533.75). Judy Cominse [Seller] will receive $1,500.00 (100% of the escrow deposit relinquished by the buyer [Buyer Swinton]) by mail upon acceptance. Paragraph 5 of Seller's Addendum indicates that, upon Respondent's accepting the Seller's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. Respondent executed the Seller's Addendum on August 11, 1998, and faxed it to her on this same date. Respondent accepted the Seller's Addendum on August 11, 1998. Prior to August 11, 1998, Berman had contacted Respondent on behalf of the Seller. Berman was requested by the Seller to make an attempt to obtain the escrow deposit of $1,500 for her. Berman contacted Respondent who indicated to Berman that, as soon as the escrow check was received, he would contact Berman. Sometime after July 30, 1998, Berman contacted Sun Title and was informed that the escrow check had been prepared and forwarded to Respondent. On or about August 11, 1998, Respondent contacted the Seller and informed her that the escrow check had been received by him. On or about August 11, 1998, Respondent also contacted Berman regarding the receipt of the escrow check. At the request of the Seller, Berman went to Respondent's office, obtained the escrow check, and forwarded it to the Seller via express delivery. Based upon the required proof, the evidence fails to demonstrate that Respondent refused to relinquish the $1,500 escrow deposit to the Seller in order to force or pressure the Seller to agree to an addendum to their Agreement. Respondent continued to represent the Seller. The Seller's property was sold on November 3, 1998. Subsequently, Respondent sued the Seller in the County Court of West Palm Beach, Florida for $533.75, based on the Seller's Addendum. The Seller had refused to pay Respondent the $533.75, pursuant to the Seller's Addendum, and Respondent sued the Seller to recoup the monies. On or about January 4, 1999, the court suit was settled. Before the end of 1998, Respondent paid Berman the referral fee.
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 and therein dismiss the Administrative Complaint filed against Leon Stellings. DONE AND ENTERED this 31st day of July, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 31st day of July, 2000.
The Issue Whether Respondents committed the offenses set forth in the administrative complaints and the amended administrative complaint and, if so, what action should be taken.
Findings Of Fact On May 26, 1989, the Department of Professional Regulation (now, the Department of Business and Professional Regulation), Board of Auctioneers (Petitioner) licensed Irwin Sherwin (Respondent Sherwin) as an auctioneer. He was issued license number AU 0000720. However, Respondent Sherwin was initially denied licensure. On December 29, 1986, Respondent Sherwin submitted an application for licensure, without examination, as an auctioneer to the Petitioner. By order dated October 22, 1987, the Petitioner denied Respondent Sherwin's application on the basis that Respondent Sherwin had been charged with grand theft. Respondent Sherwin requested an informal hearing on his denial. By final order dated September 14, 1988, and filed September 19, 1988, the Petitioner granted Respondent Sherwin's application, subject to certain special conditions, including payment of a $10,000 fine, posting of a $300,000 auctioneer bond,3 and imposition of a period of probation after licensure, with Respondent Sherwin, during the probation, practicing under the supervision of an approved auctioneer. Subsequently, through agreement made by Respondent Sherwin at Petitioner's meeting held on February 16, 1989, the Petitioner modified the bond requirement by order dated March 4, 1989, and filed March 9, 1989, to include the following: (a) a $10,000 auctioneer bond and a $25,000 auction business bond, within 30 days of February 16, 1989, to permit licensure; and (b) a $25,000 auctioneer bond and a $50,000 auction business bond, within 30 days of the date of the order, in order for Respondent Sherwin to maintain licensure. On or about October 20, 1989, after Respondent Sherwin was licensed by the Petitioner, Respondent Sherwin obtained a $25,000 auctioneer bond from American Bankers Insurance Company of Florida. On November 6, 1989, Respondent Sherwin posted the bond with the Petitioner. On February 19, 1990, Respondent Beach Auction House, Inc. (Respondent Auction House) was licensed by the Petitioner as an auction business. Respondent Auction House was issued license number 0000531. As a condition of licensure, Respondent Auction House was required to obtain a bond for an auction business. On or about December 1, 1989, Respondent Auction House obtained a $25,000 bond as a auction business from American Bankers Insurance Company of Florida, the same surety for Respondent Sherwin. The president of Respondent Auction House was Respondent Sherwin's son, Louis Sherwin. The address for Respondent Auction House was 2009 Northeast 2nd Street, Deerfield Beach, Florida. On December 1, 1993, Respondent Auction House's license became delinquent for failure to renew its license. Respondent Auction House's license has remained delinquent since December 1, 1993. Case No. 95-3710 In August 1974, the North Carolina Auctioneer Licensing Board (North Carolina Auctioneer Board) licensed Respondent Sherwin as an auctioneer and licensed Blowing Rock Auction Galleries, Inc., his business, as an auction firm. On March 14, 1994, in the General Court of Justice, Superior Court Division, Wake County, North Carolina, Case Nos. 94-CRS-2435, 2441, 2443, 2448, pursuant to a plea agreement, Respondent Sherwin pled guilty to two felony counts of embezzlement of state property and two felony counts of embezzlement of county property. The embezzlement related to unpaid sales tax due the State of North Carolina and one of its counties by Respondent Sherwin's business, Blowing Rock Galleries, Inc., for which Respondent Sherwin was responsible under the law of the State of North Carolina. As part of the plea agreement, among other things, Respondent Sherwin was sentenced to 6 years in North Carolina's state prison, but his sentence was suspended, and he was placed on unsupervised probation for 5 years under certain specific conditions. On advice of counsel, Respondent Sherwin entered into the plea agreement.4 The felony convictions against Respondent Sherwin have not been set-aside or voided by a court of competent jurisdiction. By Consent Order dated December 21, 1994, the North Carolina Auctioneer Board took action against Respondent Sherwin and Blowing Rock Auction Galleries, Inc., related to several improprieties, including the embezzlement felonies, under the laws and rules governing auctioneers in the State of North Carolina. As to the improprieties, Respondent Sherwin, his son, Louis Sherwin and Blowing Rock Auction Galleries, Inc., entered into a settlement agreement in which they agreed, among other things, that their licenses, issued by the North Carolina Auctioneer Board, would be surrendered and that their licenses would be considered permanently revoked. By the Consent Order, the North Carolina Auctioneer Board approved the settlement agreement and pursuant to the settlement agreement, ordered, among other things, the surrender of the licenses of Respondent Sherwin, his son, and Blowing Rock Auction Galleries, Inc., subject to the conditions and limitations of the settlement agreement. Case Nos. 95-5044 and 95-5046 On March 17, 1994, Tanya Braunshteyn and her husband, Michael Braunshteyn, while on vacation, attended an auction at Respondent Auction House. Respondent Sherwin was present at the auction but did not conduct the auction. The Braunshteyns were successful bidders on a picture or framed sculpture, a ring, and a china set at a total cost of $3,483.30. The Braunshteyns did not purchase the merchandise at that time but left a deposit. The following day the Braunshteyns returned to Respondent Auction House to retrieve and pay for their merchandise. They paid $3,250 in cash as partial payment for the merchandise and received the picture or framed sculpture and the ring, together with a receipt, written descriptions of the merchandise received, and certificates of valuation. Respondent Sherwin agreed that the Braunshteyns could pay the balance, $233.30, for the china by check at a later time and that the china would be shipped to them after receipt of the check. On March 26, 1994, Mrs. Braunshteyn mailed a check to Respondent Sherwin in the amount of $233.30 for the balance on the china. On April 11, 1994, the check cleared her bank. However, the Braunshteyns did not receive the china. They made several telephone calls to Respondent Auction House and spoke with Respondent Sherwin several times inquiring about the china. The Braunshteyns received several different and unsatisfactory reasons as to why the china was not sent to them. On March 18, 1995, approximately 11 months after the balance was paid on the china, the Braunshteyns were again vacationing in Florida. They visited the Respondent Auction House with the specific intent of receiving a refund of the money they paid for the china that they never received. At that time, Respondent Sherwin refunded their money in full for the china. Case No. 95-5045 After inquiry from the Petitioner, by letter dated May 19, 1995, American Bankers Insurance Company notified the Petitioner that Respondent Sherwin's surety bond had been cancelled. The Bond Notice of Cancellation, accompanying the letter, indicates that the auctioneer's bond was cancelled effective November 18, 1990, due to an underwriting decision by the surety. Respondent Sherwin does not dispute that a surety bond was not maintained and in force for either him, as an auctioneer, or for Respondent Auction House, as an auction business.5 Case No. 95-5047 In 1989 Louis Carusillo consigned to Jack Beggs approximately 1000 items of merchandise, including furniture, jade, and sculptures, worth between $600,000 and $800,000. Mr. Beggs owned an auction business located in Sarasota, Florida. Sometime in 1990, without Mr. Carusillo's knowledge or consent, Mr. Beggs re-consigned and delivered a substantial portion of Mr. Carusillo's merchandise to Respondent Sherwin in Blowing Rock, North Carolina. Respondent Sherwin received the merchandise in two or three truckloads at his auction gallery, Blowing Rock Auction Galleries, Inc., in Blowing Rock. At the time of delivery, Respondent Sherwin failed to inventory Mr. Carusillo's merchandise. As a result of the failure to inventory, Mr. Carusillo's merchandise was commingled with merchandise belonging to Respondent Sherwin at Blowing Rock Auction Galleries. All of Mr. Carusillo's merchandise were tagged with his initials on them. At some point in time, Respondent Sherwin noticed Mr. Carusillo's initials on the merchandise. Respondent Sherwin recognized Mr. Carusillo's initials, due to a prior business dealing in years past in which Mr. Carusillo had consigned some merchandise to Respondent Sherwin. In the summer of 1990, Respondent Sherwin telephoned Mr. Carusillo regarding Mr. Carusillo's merchandise at Blowing Rock Auction Galleries received from Mr. Beggs. The telephone conversation with Respondent Sherwin was the first time that Mr. Carusillo had knowledge of the merchandise that he had consigned to Mr. Beggs being delivered to Respondent Sherwin. Mr. Carusillo viewed his past transaction with Respondent Sherwin as unsatisfactory and had no intentions of allowing Respondent Sherwin to possess and sell his merchandise. Mr. Carusillo conveyed his position to Respondent Sherwin. Mr. Carusillo refused to consign any of his merchandise to Respondent Sherwin and refused to sign any written agreement authorizing Respondent Sherwin to sell any of the merchandise. Despite knowing of Mr. Carusillo's position and despite having no written agreement authorizing the sale of any of Mr. Carusillo's merchandise, Respondent Sherwin retained Mr. Carusillo's merchandise and sold some of the merchandise at both Blowing Rock Auction Galleries and at Respondent Auction House. (In the winter of 1990, Respondent Sherwin had Mr. Carusillo's merchandise delivered to Respondent Auction House.) In 1991, Mr. Carusillo filed a civil action against, among others, Respondent Sherwin and his son, Louis Sherwin, in the Circuit Court of Broward County, Florida, Seventeenth Judicial Circuit, Case No. 91-03351. Through the law suit, Mr. Carusillo sought, among other things, the return of his merchandise in the possession of Respondent Sherwin, an injunction to stop further sales of his merchandise by Respondent Sherwin, and an accounting of his merchandise from Respondent Sherwin. An Agreed Temporary Injunction was entered by the Court on February 14, 1991, forbidding, among other things, the sale or removal of Mr. Carusillo's merchandise and ordering an accounting of his merchandise. An Agreed Order as to Replevin was entered by the Court on May 9, 1991, allowing, among other things, Mr. Carusillo to remove his merchandise from Respondent Sherwin's possession. Even though Respondent Sherwin rendered an accounting of Mr. Carusillo's merchandise, the accounting was not satisfactory. Furthermore, even after Mr. Carusillo removed what he thought was all of his merchandise, Respondents sold other merchandise belonging to Mr. Carusillo. After protracted litigation, by an Amended Final Judgment dated April 26, 1995, entered nunc pro tunc August 18, 1994, the Court entered judgment against Respondent Sherwin, his son (Louis Sherwin), and Mr. Beggs. As to Respondent Sherwin and his son, the Court found that they were jointly and severally liable and awarded Mr. Carusillo, among other things, the sum of $468,959.74, which included the following: a total pecuniary loss of $113,639.30 (including interest of $12,167.80), pre- judgment interest of $44,347.28, treble damages for civil theft, which brought the total to $473,959.74, and a credit to Respondent Sherwin and his son, which reduced the total to $468,959.74. The Amended Final Judgment was appealed but was upheld by the appellate court. At the hearing in the instant case, Respondents attempted to show that the monetary loss to Mr. Carusillo, as evidenced by the Amended Final Judgment, was incorrect and improper. However, the evidence presented by Petitioner at hearing was clear and convincing that the monetary judgment entered by the Court should not be disturbed. Respondents failed to present evidence to overcome Petitioner's showing. By Order dated September 27, 1996, the Circuit Court of Broward County directed payment to Mr. Carusillo for the judgment from the Auctioneer Recovery Fund in the amount of Mr. Carusillo's "actual and direct losses occurring subsequent to October 1, 1991." Subsequently, Mr. Carusillo made a claim for payment of the judgment from the Auctioneer Recovery Fund. On December 6, 1996, Petitioner considered Mr. Carusillo's claim. On December 31, 1996, Petitioner entered an order on the claim ordering, among other things, that Mr. Carusillo be paid $94,575 from the Auctioneer Recovery Fund and that $47,287.50 of the $94,575 was attributable to Respondent Sherwin. On or about January 15, 1997, a warrant from the State of Florida was issued for $94,575, representing payment to Mr. Carusillo from the Auctioneer Recovery Fund.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Auctioneers enter a final order: Finding that Irwin Sherwin violated Subsection 468.389(1)(l) and (k), Florida Statutes, of Counts I and II, respectively, in Case No. 95-3710. Finding Beach Auction House violated Subsection 468.389(1)(e), Florida Statutes, in Case No. 95-5044. Finding Irwin Sherwin, d/b/a Beach Auction House, Inc., violated: Subsection 468.389(1)(j), Florida Statutes, of Counts I and II in Case No. 95-5045. Subsection 468.389(1)(e), Florida Statutes, in Case No. 95-5046. Subsection 468.389(1)(j), Florida Statutes, of Count I in Case No. 95-5047. Subsection 468.389(1)(e), Florida Statutes, of Count II in Case No. 95-5047.6 Subsection 468.389(1)(h), Florida Statutes, of Count III in Case No. 95-5047. Subsection 468.389(1)(c), Florida Statutes, of Count V in Case No. 95-5047. Imposing a $8,000 administrative fine against Irwin Sherwin. Imposing a $6,000 administrative fine against Beach Auction House, Inc. Revoking the license of Irwin Sherwin. Revoking the license of Beach Auction House, Inc. DONE AND ENTERED this 17th day of February, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 1998.
Findings Of Fact At all times material hereto, Respondent Mark S. Henderson (hereinafter "Henderson") has been a real estate salesman licensed in the State of Florida, having been issued License No. 0441662. At all times material hereto, Respondent Auction World of West Florida, Inc., (hereinafter "Auction World") has been a corporate real estate broker registered in the State of Florida, having been issued License No. 0238372. Respondent Henderson is a real estate salesman/auctioneer employed by Auction World. He moved to Florida in October, 1984, and became a licensed real estate salesman in Florida in February, 1985, some 8 months prior to the transaction forming the basis for the Administrative Complaint. John and Joanne Henneberry signed a listing for the auction/sale of their home with Auction World through Henderson. The Henneberrys are both educated people who had prior experience in buying and selling real estate. The October 1, 1985 listing signed by the Henneberrys provided that it was a 30-day listings provided for a seven percent commission, provided for the Henneberrys to pay advertising costs not to exceed $750, and provided specifically that the $750 would not be considered as an advance fee. The listing further provided for an accounting to be made within 30 days. The Henneberrys gave Auction World a check for $750. The Henneberrys' best friend is Ralph Marciano, a real estate broker. He sold his home through Auction World and referred the Henneberrys to Auction World. The Henneberrys purchased a home through Marciano and throughout the transactions involved here consulted Marciano about how to proceed. Auction World was engaged primarily to sell the Henneberrys' home in Lehigh Acres, and Marciano was involved in the purchase or offers to purchase their new home. Pursuant to the listings advertising for the auction was published by Auction World. The auction was held on October 19, 1985, but no sale resulted from the contract negotiated through the auction. Auction World continued to work on behalf of the Henneberrys pursuant to an oral extension. Johan Ruhe and his wife were advised by Henderson of the availability of the Henneberrys' home in Lehigh Acres. Johan Ruhe is a retired real estate broker who now works for Lee County as its Director of Land Management. In December, 1984, an offer of $66,000 was made by the Ruhes to the Henneberrys through Auction World, but this offer was not accepted. On January 2 or 3, 1985, the Ruhes made an offer on the Henneberrys' home in the amount of $68,000. The offer provided for no down payment; included the range, refrigerator, dishwasher, washer, dryer, curtains and draperies to be included in the sale price; and called for financing over 30 years at an 11 percent fixed rate of interest. It further required that financing be obtained for 80 to 95 percent of the purchase price. This offer was accepted by the Henneberrys, and all parties considered this to be a binding legal contract. The original listing had called for a 7 percent commission, but when the $68,000 contract was signed, the Henneberrys negotiated Auction World from a 7 percent commission down to a $3,000 commission. The Ruhes filed a loan application with B. F. Saul Mortgage Company (hereinafter "B. F. Saul") based upon the $68,000 contract. B. F. Saul has an office in Fort Myers, Florida, which was opened on May 2, 1983, by Robert W. Prange (hereinafter "Prange") who at all times relevant to this action was a vice-president of B. F. Saul and branch manager of the local office. On January 11, 1986, the Henneberrys made an offer to purchase a home from the Jamilles, which was contingent on the Henneberrys closing with the Ruhes. Prior to signing the contract with the Ruhes, the Henneberrys discussed the contract with their best friend, real estate broker Marciano who made changes to the contract and discussed with the Henneberrys the fact that there was no deposit provided in reference to that contract. After the Henneberrys signed the contract to purchase a home from the Jamilles, the Jamilles' broker indicated to the Henneberrys that the Jamilles would like the Henneberrys' contract with the Ruhes to have a provision for a deposit. During this period of time, the Henneberrys were in direct contact with Prange at B. F. Saul, and Prange indicated to them that there was no problem with the Ruhe contract and loan application. After the Jamilles' broker contacted the Henneberrys and asked for a contract showing an escrow deposit on the Henneberry home, the Henneberrys contacted Henderson at Auction World and asked him to draw a new contract to show that a down payment had been made. Henderson prepared a new contract, and the Ruhes signed it. The new contract showed a deposit of $3,600, a purchase price increase of $3,600, and a commission increase of $3,600. In order to show the deposit requested by the Henneberrys, Auction World "gifted" by letter the $3,600 to the Ruhes. The contract was then presented to the Henneberrys. In fact, the Ruhes were not paying $3,600 more to purchase the home for which they already had a contract. Since the new agreement increased the commission by $3,600, Auction World by letter was giving back that sum to the Ruhes so that everything actually stayed the same but an escrow was shown as requested by the Henneberrys. The Henneberrys signed the new contract. At the time that they signed, they knew that the Ruhes were not paying the $3,600 additional purchase price. About the same time that the Henneberrys were requesting that the contract be redrawn to reflect a down payment from the Ruhes, Prange at B. F. Saul became concerned as to whether the Ruhes had sufficient cash available to them to consummate the transaction. When the second contract was taken by Henderson to Prange, Prange suggested that a change be made in it from a fixed interest rate to a variable interest rate so that the Ruhes could qualify for the loan. Prange then "whited out" the listing of personal property that appeared in the contract, suggesting that the deletion of the personal property would reflect an increased value in the price of the real estate. Although Prange was an officer of B. F. Saul, he was on a commission basis. He was not only the loan officer on the Henneberrys/Ruhes transaction, he was also the loan officer on the Henneberrys/Jamilles transaction. Accordingly, he knew that a successful consummation of the Ruhe transaction would ensure him of receiving two commissions but that a lack of success on the Ruhe transaction would automatically defeat the Jamille transaction. Prange knew that there was no escrow of $3,600 as reflected by the second contract Henderson presented to him. Yet, he requested Henderson to execute a "Verification of Earnest Money" form, which stated that an earnest money deposit had been received in the amount of $3,600 to be held toward the down payment and/or closing costs on the Henneberrys home. The form did not represent that the money was held in escrow, nor did it differentiate between whether that money was the down payment toward the purchase or whether that money was to be used toward closing costs. Henderson signed the verification that the $3,600 deposit was being held by Auction World because he believed the gift to the Ruhes was the same as having the deposit since it was Auction World's $3,600. Additionally, the buyer, the seller, and the loan officer were aware of the contents and reasons for the series of contracts, and the gift was evident from the series of contracts involved. Henderson prepared another contract. He also prepared an addendum to that contract containing an agreement on the purchase of the personal property since he believed the personal property had to be mentioned somewhere in order to protect both the buyer and the seller. The addendum was signed on or about February 13, 1985. The newest contract also provided for the seller to pay the closing costs. When the addendum was presented to the Henneberrys they insisted that an additional provision be added to the addendum that would guarantee that the buyer would pay the Henneberrys $4,000 toward the closing costs prior to the closing. Therefore, at the Henneberrys' request, language was added to the addendum to provide that $4,000 would be paid to the Henneberrys 72 hours prior to the closing by either Auction World or by the Ruhes. Despite the efforts of Henderson and Prange to successfully structure the Henneberry/Ruhe transaction, the Ruhes were not able to obtain approval on their loan application, and the Henneberry/Ruhe sale was not consummated. The listing agreement for the auction of the Henneberry home required that the Henneberrys pay $750 to Auction World to pay for the costs of advertising the auction. The listing contract specifically provided that the $750 did not represent an advance fee but simply represented costs of advertising. Since the statutes regulating the real estate profession do not define what constitutes an advance fee, Henderson consulted an attorney regarding the desire to obtain advertising costs in advance. The listing form used and the method of handling the Henneberrys' $750 was in compliance with the recommendation to Auction World and Henderson by that attorney. The legal advice given to them was that none of the $750 should be used on any overhead or internal expenses but rather the $750 must all be spent on independent outside advertising. Since the listing agreement specified that the $750 was not an advance fee, and since Henderson and Auction World followed the procedure recommended to them by an attorney, all parties believed that the funds were not an advance fee. The listing called for an accounting within 30 days, and an oral accounting was provided at that time. The Henneberrys did not request a further accounting until February 27 or 28, 1985. A written accounting was provided by March 11, 1985. No evidence was offered to show that any of the $750 was kept other than in a trust or escrow account at Auction World, and no evidence was offered to indicate that any of it was misused. In fact, the advertising expenses on the Henneberry home exceeded $750, and Auction World bore the extra expense.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered finding Respondents Henderson and Auction World not guilty of the allegations contained within Counts I, III, and V, and dismissing the Administrative Complaint filed against them. DONE and RECOMMENDED this 3rd day of November, 1987, at Tallahassee, Florida. LINDA M. RIGOT, 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 3rd day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0602 Respondents Henderson and Auction World's proposed findings of fact numbered 1, 30, 35, 36, and 38 have been rejected as not constituting findings or fact but rather as constituting conclusions of law or argument of counsel. Respondents Henderson and Auction World's proposed findings of fact numbered 2, 6, and 7 have been rejected as being immaterial to the issues under consideration herein. Respondents Henderson and Auction World's proposed findings of fact numbered 3-5, 8-29, 31-34, 37, and 39-42 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Arthur R. Shell, Jr., Esquire Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 E. G. Couse Esquire Post Office Drawer 1647 Fort Myers, Florida 33902 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against H. Ernest Morris, Sr. be DISMISSED with prejudice. DONE and ENTERED this 3rd day of May, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 1984. COPIES FURNISHED: Tina Hipple, Esquire P. O. Box 1900 Orlando, Florida 32802 Carmine M. Bravo, Esquire 1450 State Road 434 Longwood, Florida 32750 Steven H. Coover, Esquire P. O. Drawer H Sanford, Florida 32771 Fred M. Roche, Secretary 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold R. Huff, Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION Petitioner, vs. CASE NO. 0034049 DOAH NO. 83-3273 H. ERNEST MORRIS, SR. Respondent. /
The Issue The issues in this case are whether Respondent violated Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), Florida Statutes (1997), by operating as a broker without holding a valid broker's license, operating as a broker while licensed as a salesperson, collecting money except in the name of his employer, and committing misrepresentation, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust; and, if so, what, if any, penalty should be imposed. (All Chapter and Section references are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Respondent is licensed in the state as a salesperson pursuant to license number 0575377. The last license issued was issued as an involuntary inactive salesperson at 361 Godfrey Road Southeast, Palm Bay, Florida 32909. After March 31, 1995, Respondent's license as a salesperson became inactive after Respondent did not renew it. Between March 1994 and January 1997, Respondent was employed as a salesperson by Prestige Homes of Brevard, Inc. ("Prestige"). Prestige is a Florida corporation wholly owned by Mr. Mark Pagliarulo and Mr. John Wales. Prestige is engaged in the business of residential construction. Mr. G. Wayne Carter was the sponsoring broker for Respondent from March 1994 through January 1997. Mr. Carter was licensed in the state as a broker until his license was revoked in 1998. Between March 1994 and January 1997, Prestige paid Respondent a sales commission of three percent of the sales price of each home constructed by Prestige and sold by Respondent. Prestige paid Respondent a weekly draw against commissions earned by Respondent. Mr. Carter, the sponsoring broker for Respondent, had no knowledge of the payments received by Respondent. Respondent did not deposit any sales commissions to Mr. Carter's escrow account. Respondent participated in various activities that violate relevant provisions in Sections 475.25 and 475.42. Respondent collected $1,100 from Marcia Pitts for a sprinkler system, a $1,000 initializing fee from Linda and David Grogan, and a $1,000 "design fee" from Mrs. Robert Leudesdorf. Respondent converted the foregoing sums to his personal use without the knowledge of his employers at Prestige and without the knowledge of Respondent's broker. Respondent operated as a broker without a valid broker's license, while licensed as a salesperson, and collected money for himself rather than for his broker or his employer. Respondent routinely designed variations on a "custom" home design without his employers' knowledge. Respondent then charged the purchasers approximately $1,000 for the plan changes. Respondent routinely deducted the $1,000 fee from the contract price Prestige charged the customer and converted the $1,000 fee directly to his personal use. Respondent failed to disclose to the purchasers that he was not acting on behalf of Prestige. The purchasers believed they were dealing with Prestige. The omission and failure to disclose amounted to a misrepresentation, false pretense, and breach of trust in a real estate transaction. For a time, Respondent's employers at Prestige condoned Respondent's "free lance" activities. Respondent's employers reduced Respondent's draws against commissions by the amount of the "free lance" fees converted by Respondent. After Respondent failed to discontinue his "free lance" activities, however, Prestige terminated Respondent's employment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding Respondent guilty of violating Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), and revoking Respondent's license. DONE AND ENTERED this 31st day of March, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 31st day of March, 1999. COPIES FURNISHED: Steven Johnson, Esquire Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Steven Michael Wallace 361 Godfrey Road Palm Bay, Florida 32909 James Kimbler, Acting Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 William Woodyard, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
