Findings Of Fact I.Z. Mann Realty Corporation was at all times material to this proceeding a corporation registered as a real estate broker with the Commission, with its principal business address at 240 North Washington Boulevard, Sarasota, Florida, 33577. Irving Z. Mann was at all times material to this proceeding a real estate broker registered with the Commission, and the holder of two registration certificates: one as an individual broker with an office at 2197 Princeton Street, Sarasota, Florida 33577; and the other license as president and active broker of I.Z. Mann Realty Corporation. Stanley M. Robbins was at all times material to this proceeding a registered real estate salesman in the employ of I.Z. Mann Realty Corporation. At all times material to this proceeding Fritz K. Grolock was a registered real estate salesman, and from April 12, 1972, to February 2, 1976, he was registered with the Commission as a real estate salesman in the employ of I.Z. Mann Realty Corporation. From February 2, 1976, to November 29, 1976, Mr. Grolock was registered with the Commission as a real estate salesman in the employ of I.Z. Mann & Associates, Inc. At all times material to this proceeding Irving Z. Mann was president, and Stanley M. Robbins was vice president, assistant secretary, treasurer and general sales manager of I.Z. Mann & Associates, Inc., a Florida corporation which was the owner and developer of the Palma Sola Harbor condominium development in Sarasota County, Florida. On or before February 4, 1976, Mr. Grolock and Mr. Robbins had agreed that Mr. Grolock would receive for his services as a real estate salesman for I.Z. Mann & Associates, Inc. a three percent commission based upon the sales price of individual condominium units sold at Palma Sola Harbor. Commissions were to be paid to Mr.Grolock at the end of the month in which the sale of each such unit was consummated. Mr. Robbins explained to Mr. Grolock at the time of this agreement that I.Z. Mann & Associates, Inc. was short of cash, and that should Grolock make any sales, he might have to wait for some indefinite period of time to receive his commission. Mr. Grolock indicated his willingness at the time to proceed on that basis. No testimony was adduced, and no documentary evidence was offered to establish that Mr. Grolock was employed by I.Z. Mann Realty Corporation, Inc., at any time material to the allegations contained in the Administrative Complaint. During the course of his employment as a real estate salesman with I.Z. Mann Realty Corporation, Inc. Mr. Grolock solicited and obtained a real property sales contract between Elmer C. Sutter and Ruth W. Sutter, as purchasers, and I.Z. Mann Realty Corporation, Inc., as seller, for a condominium unit in the Palma Sola Harbor project. The purchase price of the unit was $26,450, and the evidence established that Mr.Grolock is due, and has not been paid, a commission of $793.50 for that sale. During the course of his employment as a real estate salesman with I.Z. Mann & Associates, Inc., Mr. Grolock solicited and obtained a real property sales contract between Martin G. Tepatti and Dorothy L. Tepatti, as purchasers, and I.Z. Mann Realty Corporation, Inc., as seller, for a condominium unit in the Palma Sola Harbor project. The purchase price of the unit was $37,450, and the evidence established that Mr. Grolock is due, and has not been paid, a commission of $1,123.50 for that sale. During the course of his employment as a real estate salesman with I.Z. Mann Realty Corporation, Inc., Mr. Grolock solicited and obtained real property sales contract (Petitioner's Exhibit #1) dated April 29, 1976, between Donald F. Brown and Barbara S. Brown, as purchasers, and I.Z. Mann Realty Corporation, Inc. as seller, for a condominium unit in the Palma Sola Harbor project. The purchase price of the unit was $37,450, and the evidence established that Mr. Grolock is due, and has not been paid, a real estate commission of $1,123.50 for that sale. Mr. Grolock did not attend the closing of any of the three transactions referenced above and described in the Administrative Complaint. However, the only evidence of record establishes that these transactions resulted in "negative closings" that is, after deductions of amounts due on the pre-existing construction mortgage, charges for documentary stamp taxes, tax pro-rations and the like, no funds remained for disbursement to I.Z. Mann Realty Corporation, Inc. for payment to Mr. Grolock as a commission. Neither Mr. Mann, Mr. Robbins, I.Z. Mann Realty Corporation, nor I.Z. Mann & Associates, Inc. received any funds at the closing of these transactions. Some time after the closings of the three transactions described in the Administrative Complaint, Mr. Grolock spoke with Mr. Robbins concerning non- payment of his commissions. Mr. Robbins explained t6hat the three transactions had resulted in "negative closings," but that if Mr. Grolock would be patient he would be paid his commissions in due course. Mr. Robbins discussed the commissions once or twice thereafter with Mr. Grolock, each time explaining that the company was short of money but that Mr. Grolock would be paid eventually. Because of poor market conditions in the condominium industry, I.Z. Mann Realty & Associates experienced financial problems which ultimately resulted in the company's insolvency. The company eventually voluntarily relinquished its assets to creditors, or had its interest in those assets foreclosed, and at the present time is no longer actively engaged in business. By letters to Mr. Robbins dated December 7, 1976, and January 19, 1977, (Petitioner's Exhibit #2) Mr. Grolock demanded that some arrangements be made for payment of his past due commissions. When he received no reply to these letters, Mr. Grolock sent a letter (Petitioner's Exhibit #2) to Mr. Mann dated April 25, 1977, listing the transactions which resulted in $3,040.50 being owed to him for real estate commissions. Shortly after receiving this letter, Mr. Mann telephoned Mr. Grolock, on May 5, 1977, and told him ". . . the company had been inactive for a long time, but that I would see to it that he would get paid eventually. Just give us a chance to get some money to do it." (Transcript, p. 63). Mr. Grolock agreed at that time to wait for payment of his commissions. Some time after his May 5, 1977, telephone conversation with Mr. Mann, Mr. Grolock filed a complaint with the Commission ". . . [b]ecause I found no other recourse. . . [t]o obtain my commission . . . ." (Transcript, p. 26).
The Issue Whether Respondent Garrison's license as a real estate broker and Respondent Arbree's license as a broker-salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, F.S., as set forth in the Administrative Complaint, dated December 22, 1980. This proceeding commenced with the filing of an Administrative Complaint by the Department of Professional Regulation on December 22, 1980 alleging that Respondents Gary D. Garrison and Joseph M. Arbree had violated Subsection 475.25(1)(a), Florida Statutes in connection with a 1977 real estate transaction wherein Respondents allegedly failed to disclose to the seller that purchaser Respondent Arbree was a licensed broker-salesman and that Respondent Garrison had, or would have a financial interest in the property upon its purchase. The Respondents requested an administrative hearing on the charge and filed a Motion to Dismiss claiming that Petitioner lacked jurisdiction to proceed in the cause in that there had been no lawful compliance with the provisions of Section establishment of any fiduciary relationship between the Respondents and the seller of the property in question, and that Petitioner had not complied with the motion was reserved until argument was presented at the final hearing. At that time, the motion was denied for reasons which will be set forth in the Petitioner forwarded the Request for Hearings to this Division on July 1, 1981 and hearing was set for September 17, 1981. On August 27, 1981, Petitioner Oklahoma on September 9, 1981. Respondent filed objections to the said notice, together with a Motion For Protective Order, claiming that the notice period was depositions outside the State for use at trial. Respondent sought either to have the notice "stricken" or that a protective order be entered to require deposition or, alternatively, that the deposition testimony not be allowed in evidence at final hearing. The motion was denied by the Hearing Officer on At final hearing on September 17, 1981, Petitioner announced that the deposition of McNickle, an indispensable witness, had not yet been received. deposition as a late-filed exhibit, a continuance was granted until November 23, 1981, to permit receipt of the deposition and to afford Respondents an its taking in Oklahoma. Although the parties were afforded the opportunity to file Proposed herein, no post-hearing submissions have been filed.
Findings Of Fact times material to the complaint was registered as a real estate salesman with Investment Equity Corporation, Palm Beach Gardens, Florida. Respondent Joseph he was associated with Investment Equity Corporation during the times material to the allegations in the Complaint. (Testimony of Respondents) acre unimproved lots in a development called Palm Beach Country Estates located in Palm Beach County, Florida. The purchase price of each lot was telephoned Respondent Garrison and they thereafter had several telephone conversations which led to the sale of the three lots to Respondent Arbree. The found that Respondent Garrison's version is more credible. In the initial conversation, McNickle advised Garrison of his ownership of the three lots and to inspect the lots and advise him as to the distance to electrical power, the type of roads adjacent to the lots, and whether the lots were corner lots. and that he was interested in trying to get his money back from the company. There was no mention of the value of the lots or of listing the property for sale. Garrison inspected the lots and, in a subsequent telephone conversation with McNickle, informed him that the nearest electrical power was approximately 1-3/4 miles from the lot locations, that they were on a dirt road, and that none were corner lots. He also informed him that the lots were approximately fifty percent under water during the rainy season. During this conversation, Garrison told McNickle that he had an "associate" with Investment Equity who sometimes purchased such lots. McNickle asked him to see if he could obtain an offer on the lots. Garrison then asked Respondent Arbree if he desired to purchase the lots, and the latter agreed if he could obtain financing for the purchase. Arbree asked Garrison if there was a listing on the property and Garrison told him that there was not. The reason for this inquiry was that Arbree had in the past frequently made personal purchases of real estate and had disclosed his status as a real estate salesman on such contracts when the property was listed with a broker. A question had arisen in his office as to when licensed real estate personnel should disclose their status to sellers when buying on their own account. Arbree had resolved this question in his mind some time previously by telephoning the legal office of the Florida Real Estate Commission and receiving information from someone there that it was not necessary to make such disclosure if the property was not listed with a real estate office. (Testimony of Respondents, McNickle (Deposition-Petitioner's Exhibit 3), Petitioner's Exhibit 4-1, Respondents' Exhibits 1-4) On February 28, 1977, Respondent Arbree executed a deposit receipt contract whereby he agreed to pay McNickle $15,000.00 for the three lots. The contract originally provided for a $500.00 deposit evidenced by Arbree's promissory note to be held in trust by the Investment Equity Corporation, but this was later deleted by the parties at the request of McNickle, and a $500.00 check as deposit was placed in the Investment Equity Corporation Trust Account on March 10, 1977. The check was drawn on the account of J. V. Company and signed by both Respondents. J. V. Company was simply a bank account established by Arbree and Garrison sometime prior to the McNickle transaction to serve as a depository for funds which were generated through sales for their private account. Both signatures were required for issuance of checks. Originally, the funds in the account were exclusively those of Arbree and these were the funds used for the deposit and subsequent mortgage payments to McNickle. (Testimony of Respondents, Petitioner's Exhibits 1, 4-5, 4-9, 5) The deposit receipt contract was executed by Melvin F. McNickle and his wife on March 10, 1977. The contract provided that "The buyer hereby recognizes Investment Equity Corporation by separate agreement as the broker in this transaction". This provision made reference to the fact that in cases where associates of Investment Equity Corporation purchased property in their own name which was not listed with the firm, the firm broker did not require payment of any commission. On the other hand, if an associate sold his own property, whether or not listed with Investment Equity Corporation, office policy required that he pay the firm a three percent commission for overhead, escrow maintenance, and the like. The commission was payable directly to the company and not shared with any of the associates. McNickle did not enter into a listing contract with the firm nor did he pay a real estate commission on the sale. The real estate transaction closed on August 1, 1977. Warranty deeds, dated July 26, 1977, for each of the three lots were issued by McNickle to Arbree. (Testimony of Respondents, Brown, Petitioner's Exhibits 1, 4-3, 4-4, 4- 5) Garden lots and is familiar with the selling price places the top value on choice lots of $8,000.00 in 1977, and $4,000.00 to $5,000.00 if fill was Shortly after Arbree had contracted with McNickle for the sale of the lots, Arbree told Garrison that if the lots could be resold at a profit, he McNickle contract had been entered into, another associate at Investment Equity Corporation told Garrison that he had a prospect looking for vacant land, and prospect, Carl Doty, was contacted by Garrison and, on March 17, 1977, a contract for sale and purchase was entered into between Arbree and Doty for the Investment Equity Corporation as the broker and agreed to pay a commission of three percent of the gross sales price to the firm. This was in accordance with minimum commission for processing a sale of property owned by the associate. Garrison did not receive a commission on the sale, but did receive one half of Arbree. Warranty deeds were issued to Doty by Arbree on August 24, 1977. The proceeds of the sale were placed in the J. V. Company bank account. (Testimony This case was originally docketed in the Florida Real Estate Commission in September, 1978, but was not investigated until December, 1979. A prior to comply with the notice provisions of Chapter 120, Florida Statutes. (Testimony of Stephens) Petitioner's proposed disciplinary action against both Respondents is predicated upon their alleged failure to disclose to the seller of the lots in Petitioner, and that Respondent Garrison had or would have a financial interest in the said property upon its purchase. The said nondisclosure is alleged to trick or device, breach of trust", and that thereby each Respondent "has aided, assisted or conspired with another in furtherance thereof, all in violation of subsequently reenacted and renumbered (Subsection 475.25(1)(b), F.S. (1981)), the provisions of the cited ground for disciplinary action have remained the penalties. The evidence in this case falls short of the standard required under (Fla. 1st DCA 1981), i.e., that in a proceeding which "may result in the loss of a valuable business or professional license, the critical matters at issue must Here, the fact that the real property in question was not the subject of a listing contract with Respondents' firm, Investment Equity Corporation, raises commission was paid to Respondent Garrison or to the firm by the seller, nor was any expected. Respondents and their broker treated the transaction as a private Respondents misled McNickle in any respect. Garrison made it clear at the outset that Arbree was his associate in the firm and was acting in his own behalf. The circumstances demonstrate that Garrison was acting as a gratuitous "middle man" for the benefit of both parties. The offer of Arbree, which was accepted by McNickle, was not unreasonable in the light of the location of the lots and other relevant considerations bearing on market value. The evidence shows that the McNickle lots were purchased solely with Arbree's funds, even though the checks issued for the deposit and several mortgage payments were drawn on the "J. V. Company" account which had been used in a limited fashion in the past by both Respondents in real estate ventures. No competent evidence was presented to show that Respondent Garrison had acquired a financial interest in the Arbree-McNickle transaction. On the contrary, the evidence establishes that subsequent purchaser Doty was made known to Garrison as a prospective purchaser of the lots only after the purchase contract between Arbree and McNickle had been executed, and that Respondents had not agreed to split any profits in a resale until that time. It is undoubtedly true that if Investment Equity Corporation had had a broker-principal fiduciary relationship with McNickle, the duties resulting therefrom would have also been imposed upon Garrison as a salesman, and he would have been obliged to disclose to McNickle the circumstances concerning his subsequent interest in the resale to Doty. This was not the case, however, and no such duty can be found in the light of the existing circumstances. Although it is recognized that a registrant can violate Subsection 475.25(1)(a), F.S. (1977) for dishonest conduct in a business transaction for his own account, as well as for such conduct in which his only interest is as a broker (or salesman) Sellars v. Florida Real Estate Commission, 380 So.2d, 1052 (Fla. 1st DCA 1979), the evidence here is insufficient to so characterize Respondents' conduct. It is therefore concluded that Petitioner has failed to establish that Respondents violated Section 475.25(1)(a), F.S. as alleged. Although the foregoing conclusion renders it unnecessary to deal with Respondents' various claims concerning Petitioner's failure to accord them procedural rights in the prehearing process, it is considered that the amendment to Section 120.60(6), F.S. by Chapter 81-180, Laws of Florida, effective July 1, 1981, renders any defense based on the prior Section 120.60(6)(1979) no longer available. Additionally, Respondents' contentions that this proceeding is barred by the statute of limitations applicable to criminal prosecutions or by statutory laches are not well founded. Finally, Respondents did not establish any failure of Petitioner to comply with the applicable provisions of Chapter 455, Florida Statutes, in processing this case.
Recommendation It is recommended that the Board of Real Estate dismiss the allegations against Respondents Gary D. Garrison and Joseph M. Arbree. DONE and ENTERED this 6th day of January, 1982, in Tallahassee, Florida. Division of Administrative Hearings The Oakland Building Tallahassee, Florida 32301 (904) 488-9675 Division of Administrative Hearings this 6th day of January, 1982. Harold M. Braxton, Esquire 45 Southwest 36th Court Salvatore A. Carpino, Esquire Department of Professional 130 North Monroe Street Tallahassee, Florida 32301 611 North Pine Hills Road Orlando, Florida 32808 Assistant General Counsel Department of Professional 130 North Monroe Street Tallahassee, Florida 32301 Executive Director Florida Board of Real Estate Orlando, Florida 32802
Findings Of Fact At all times pertinent to the allegations contained herein, the Petitioner, Department, was the state agency responsible for the regulation of the sale and operation of time-share condominiums in Florida. The Respondent, Association, is a successor owner organization made up of owners of time- shareperiods in the complex, Sarasota Sands, located in Sarasota, Florida. Joseph T. Aube is President of the Association and has held that office since 1986. He has been an owner at Sarasota Sands since 1981. At that time, the complex was controlled by the initial developer. The complex was sold out prior to 1982, but the initial developers still maintained control of the Association Board with the individual owners being a minority representation. In 1982, however, the initial developer turned over to the period owners control of the Association. When Mr. Aube became President of the Association, he asked the management company then holding the contract with the Association for the records developed by the initial developer which pertained to the Association, but the manager was able to come up with nothing. He was told at the time that the Board was not to be bothered with management but to satisfy itself with being mere figureheads, leaving management up to the initial developers and the management company they had hired. Notwithstanding, when Mr. Aube took over as President, he was under the impression that the initial developers owned only their own units as individuals and that the balance of the units had been sold out to investors. There was, then, no sales force on the premises. Though turnover was to have taken place at the June, 1982 meeting of the Board, the management company hired by the original developers continued to manage the Association's business until it was discharged by Mr. Aube when hetook over as President in 1986. After the first management company was dismissed, the Association became the management entity and remains so to this date, operating through a manager hired by and responsible to it. The 18 units in issue came into the possession of the Association as a result of foreclosure. On foreclosure, the units belong to the Association as a whole, and when they are resold, the Association gets the proceeds of the sale. Most of the units in issue had been owned by the initial developer which held mortgages on them. When Mr. Aube signed the contracts and deeds for resale, he signed as President of the Association as seller. The By-Laws of the Association call for the President to sign any documents which pertain to the business of the Association. The deeds in question refer to units which were sold by a licensed broker with whom the Association contracted to procure buyers and to whom a commission for each sale was paid by the Association. No escrow agreement was filed with the Division because the Association did not receive any of the deposit or other money pending closing. The deposits were held by the independent broker who handled the sale. The Association has never taken title to any units other than by foreclosure and it has never solicited or sold time-share units other than those which came into its possession through foreclosure. In addition, the Association did not file any documents with the Bureau of Time-Share that are required by developers prior to offering and selling time-share periods, nordid it provide a public offering statement, approved by the Division, to any of the 18 purchasers who contracted to purchase these 18 units through the independent broker. The contract forms used by Ms. Shenko for these sales did not include the language required for inclusion in time-share sales contracts by Section 721.06, Florida Statutes. Further, with respect to these sales, the Association failed to establish an escrow account for the deposit of any funds received from the purchasers of those periods sold through the broker. Since no escrow agreement was established, none was furnished to the Division for approval. On or about January 17, 1989, Wendy S. Holcomb, the Association's manager for the complex, prepared a check drawn on the Association's account with the First Florida Bank, in the amount of $126,719.95, payable to Barbara Ford-Coates, Tax Collector of Sarasota County. The check, which was signed by Mr. Aube and Ms. Holcomb, was payment in full of the entire amount due for ad valorem real estate taxes for 1988 on the Sarasota Sands Complex. This fund did not come from a tax escrow account. The Association does not maintain such an account, agreement or bond. It was paid from the operating account of the Association since there was sufficient funds therein to pay the taxes without first receiving the tax payments due from individual owners. Tax notices were sent to the owners in January, 1989 for the 1988 taxes, and the money was due from the owners by January 31. When it came in, the money was not placed into an escrow account but was used to reimburse the operating accountsince that account had advanced the funds to pay the taxes prior to the date they were due. This practice is still followed. In essence, Ms. Holcomb admittedly never holds any money which she received from the individual owners for taxes in escrow. Deposit money received from purchasers is held by the broker, not by the Association. Proceeds from sales are received only after closing and are used to reimburse the Association for money spent. No money utilized by the Association comes from any deposit money. The Association never even sees any deposit money except that which is forfeited by prospective purchasers and which is then released to it as liquidated damages under the terms of the purchase contract. Therefore, the Association did not have an independent escrow agent and received no funds from time share purchasers which had to go into an escrow account. So long as Ms. Holcomb has been an employee of the Association, since 1985, the Association has never solicited units for sale and has sold only those it has received through foreclosure. With regard to the current allegations, as manager of the Association, Ms. Holcomb claims she was contacted by the Department by mail in either March or April, 1991 and was furnished the Notice to Show Cause. Prior to receiving that document, however, she had had no contact from the Department regarding any allegations of misconduct. There was a prior visit by a Ms. Clark from the Department who asked for books and records but she claimed she was there only to review the operation. She made no referenceto specifics of the allegations involved here, and Ms. Holcomb interpreted her visit as a routine inspection and asked no questions. Ann Marie Shenko, a licensed real estate broker, who maintains her office in one of the units in the complex, arranged the sale of the 18 units in issue here. She drew up the contracts and prepared a few of the deeds. Most deeds, however, were prepared by a title company as is routine in the conveyance of residential real estate. Ms. Shenko did no outside advertising for Sarasota Sands. She makes all sales by referral from others. When she gets a deposit on a unit, she places it into her trust account with the Southeast Bank. The Association is not a party to that account. Any proceeds received from a consummated sale are ultimately disbursed by the title company which handles the closing. In March, 1989, Ms. Shenko received a letter from Mr. and Mrs Terry Estepp in which they requested the refund of the $560.00 deposit they had placed with her for the purchase of a time unit at Sarasota Sands. Ms. Shenko had determined to forfeit the deposit and sought the advice of the Real Estate Commission because the Estepps had failed to respond timely to several pieces of correspondence she had sent them about the property. When they finally decided not to go through with the sale and requested a refund of their deposit, she refused to return it until, after advice from the Real Estate Commission, she agreed to do so and wrote a check for the sum in question on her own business account. At no time was the Association involved in this transaction. Of the 18 contracts and deeds in issue, no one other than the Estepps requested a refund of their deposit. She claims never to have been contacted by the Department regarding how she conducts her business and feels the operation is routine. Of the 18 units in issue, all were acquired by foreclosure and none goes back unsold to initial construction. Eleven of the 18 purchasers were already owners at Sarasota Sands; 6 were RCI exchanges, (owners at other similar and related resorts); and 1 was the renter of an existing unit, (the Estepps). All had had some contact with time-shares and so far as she knows, the Estepps are still interested in purchasing a time-share period at Sarasota Sands. Ms. Shenko has a trust account as a part of her real estate business. It is not an escrow account. She has never sent an escrow agreement, reflecting she had such an account, to the Department. When she gets a time-share customer, she takes a deposit which goes into that trust account. The contract for purchase is then forwarded to a title company for closing. Upon payment in full at closing, the seller is paid and she gets her commission. The buyer gets title to the unit purchased. She is not instructed by the Association regarding the disbursement of sales proceeds and gets no compensation from the Association except a commission on the sales of units owned by it - only the 18 in issue here. Though Ms. Shenko maintains her primary businessoffice in the Sarasota Sands complex, she pays no rent or utility cost - only phone. She receives no salary or guarantee from the Association and has been compensated by the Association solely through the commissions she receives on those few sales for it. She does receive commissions from unit owners when she sells their units to someone else, just as any real estate agent would. The majority of her business is in transfers of units within the Sarasota Sands complex. As to the two previous Consent Orders involving the Association, involved neither the sale nor resale of units by the Association. In one case the Association paid a small fine for alleged irregularities relating to the dismissal of the former management company. In a ratification vote take subsequent to the discharge, 90% of the owners approved the Association's action of dismissal. The other prior action relates to an ad valorem tax account and again, while the Association was chastised and fined for failure to maintain an escrow account, there was no indication the taxes were not paid when due. In neither case were the actions the result of intentional disobedience of statutes or the Department's rules. In fact, in the Spring of 1989, after reading an article about successive developers, Mr. Aube had the Association's representative contact the Department for clarification and got no answer. Though counsel contacted the Department by letter, at no time, either directly or through counsel, did the Association receive any guidance from the Department. As a result it acted on advice of counsel.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that the Notice to Show Cause in this case be dismissed. RECOMMENDED in Tallahassee, Florida this 15th day of October, 1991. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-3652 The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: Accepted and incorporated herein. & 3. Accepted and incorporated herein. Accepted and incorporated herein. - 7. Accepted and incorporated herein. Accepted to the extent that Respondent did not file any documents with the Bureau of Time-share. Rejected that the requirement for filing pertained to Respondent. - 12. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. - 6. Accepted and incorporated herein. Accepted. Not a Finding of Fact but a Conclusion of Law. Accepted and incorporated herein. COPIES FURNISHED: Mark Henderson, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Daniel E. Scott, Esquire 2710 Main Street Sarasota, Florida 34237 Janet E. Ferris Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000 Henry M. Solares Director Division of Florida Land Sales, Condominiums, and Mobile Homes 725 South Bronough Street Tallahassee, Florida 32399-1007 Donald D. Conn General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
Findings Of Fact At all times pertinent to the allegations contained herein, Petitioner, Division of Real Estate, was the state agency in Florida responsible for the regulation of the real estate profession and for the licensing of real estate professionals. Respondent was, at all times material to the issues herein, a licensed real estate salesman in this state. He was issued salesman's license 0419038 and from August 27, 1990 through September 2, 1991, was an active salesman with Scarlett Faulic & Associates located in Indian Shores, Florida. From September 3, 1991 through September 30, 1991, he was a salesman with Arn Realty Group, Inc., also in Indian Shores. Effective October 1, 1991, his license became inactive due to non-renewal and remained in that status until he renewed it on April 16, 1992 when he affiliated as a salesman with First Gulf Beach Realty, Inc. in Indian Rocks Beach, Florida. From July 28, 1992 to the date of the hearing, he was an active salesman with Bobby Byrd Real Estate, Inc. in Clearwater. Sometime prior to June 13, 1991, Ted Plihcik, presently a resident of Coram, New York and formerly the owner/occupant of the property in issue which is located in Pinellas County, Florida, met the Respondent at a garage sale at Respondent's home. Because Mr. Plihcik intended to move out of the area, he entered into a listing agreement with Respondent on behalf of Arn Realty's predecessor, under which the firm was either to rent or sell the property. This agreement was to expire on December 31, 1991, and there is no evidence it was cancelled prior to expiration. Sometime after Mr. Plihcik moved to New York, he received a telephone call from Respondent in which Respondent said he had a couple to rent the property for the rental amount previously stipulated, $650.00 per month, from which Respondent was to get a commission of 10%. Respondent indicated he would take a deposit from the tenants and that he had a signed lease. Prior to his departure, Mr. Plihcik had started to make some renovations to the property's garage. He had redone the bathroom area and was planning to make another room out of the garage. However, he never got around to completing the job or to putting in the windows. He had decided to change it back into a garage, and in fact the prospective tenants wanted a garage rather than another bedroom, so he directed Respondent to hire someone to finish the reconversion. At Plihcik's request, Respondent got several estimates for the work which Plihcik felt were too high. At that point, Respondent offered to do the work himself. Plihcik agreed and gave Respondent authorization to use the deposit money to pay for necessary materials and consistent with that agreement, on September 14, 1991, by letter, Plihcik authorized Arn Realty Group to release money to Danley for the "alterations and repairs he is doing to my property...." Because the Isabelles did not pay the full two month deposit, Mr. Plihcik later revised the authorization to allow Respondent to use rent money as well, but he did not relieve Respondent from the requirement to turn any money received as rent over to Arn Realty upon receipt and thereafter get payment from the company. It is obvious that Plihcik was under the opinion that the deposit money Danley had received from the tenants had been turned over to the broker, Arn Realty. Mr. Plihcik tried unsuccessfully repeatedly to contact the Respondent requesting a copy of the lease agreement, copies of receipts for materials purchased for the garage work, or anything else pertinent, even sending at least one letter by certified mail, the receipt for which bore what Plihcik recognized as Respondent's signature. He received no responses. Sometime in early August, 1991, Deborah Isabelle and her husband rented Mr. Plihcik's house through Respondent and put up a [portion of the 1st and last month rent. They also signed a lease which called for rent at $525.00 per month but, notwithstanding many requests for one, never received a copy. Each time they asked, Respondent would say he would get them one but he never did. At the time they rented the property, the garage was under repair and, after some negotiation, it was orally agreed upon that the work would be completed by move-in time, September 1, 1991. At one point, Respondent asked the Isabelles to pay the rent in cash because it would be easier for him to buy the things needed for the repair work he was to do. They acceded to this request for a while, writing some checks to the supermarket for cash to pay Respondent, but got only one receipt. Because they were uncomfortable with this cash arrangement, they asked Respondent for the name of the owner of the property and he replied, merely, "Ted." On one occasion, mail for Mr. Plihcik from a real estate agency came to the house. Ms. Isabelle thereafter got Mr. Plihcik's New York address from the County records, contacted him, and asked him if he had received his rent. She received a negative reply. She also asked him about the lease they had signed and he related he had not received one of those, either. In fact, when she called, Mr. Plihcik didn't know who she was he had never heard their name. During that conversation, Ms. Isabelle advised Mr. Plihcik that they had not received any of the things Respondent had promised; that he was also asking them for cash; and was frequently at the house. Mr. Plihcik said he'd take care of it but no more was done. In November, 1991, Ms. Isabelle set up a three way telephone call between the Isabelles, Mr. Plihcik and the Respondent. During that call, Respondent claimed he was doing the work promised; that he had mailed Mr. Plihcik some money in cash several weeks previously and could not understand why it had not been received. The lease agreement, at paragraph 6, dealing with maintenance and grounds upkeep, purports to require the Isabelles "... to help convert 3rd bedroom back to garage in lieu of $650.00 rent." Though Respondent contends the rent was reduced from $650.00 per month, as was called for in the listing agreement, to $525.00, conditioned upon the tenants' help with the work on the garage conversion, there is no evidence that Mr. Plihcik ever agreed to accept less than the $650.00 per month rent. In addition, Ms. Isabelle claims they did not agree to do any work and the lease did not contain that provision at the time they signed it some 2 or 3 weeks after they moved in. It is found that Respondent's contention is without merit even though Mr. Isabelle did take down some 2x4's so he could install his tool bench. Over the period of their occupancy, the Isabelles paid Mr. Danley a total of $1,531.50 by check directly or by check written for cash and turned over, as well as an additional $400.00 in cash. Six hundred dollars of the checks were made payable to Arn Realty, and it appears they were deposited to that company's account. The balance of the checks and the cash were either payable to Respondent directly or, in the case of the Kash & Karry checks, written for cash to give to him. Of the $400.00 Arn Realty check, $300.00 was paid over by company check to Respondent for repairs to the instant property on the same day as the Isabelles' check was deposited to the company account. Respondent admits he received a total of $1,355.00 from the Isabelle's, either directly or indirectly, but claims all of it was used for work on the house. He also claims he is still owed $1,001.00 from Mr. Plihcik which includes $630.00 in real estate commission owed the broker. Nonetheless, Mr. Plihcik claims he received none of the money paid to Respondent, nor has Respondent presented any evidence to show the money was spent on either materials or labor for the garage reconversion. Mr. Arn, the broker supervising Respondent during the time is issue here claims he had no knowledge Respondent had obtained a tenant for Mr. Plihcik before he got Plihcik's letter. His records show a listing agreement for the property which calls for a rental commission in the event the property were leased by the company. In this case, the commission would be paid to the company, not the salesman, and would be deposited to the company's escrow account for later split with the associate involved. At no time would it be appropriate for the sales associate to collect and disburse funds without going through the broker and he would not do it that way. He did not authorize it here. Mr. Arn admits to having written at least one check to Respondent from money's received from the tenant for work to be done on the Plihcik property. He released that money only after he received a letter from Mr. Plihcik authorizing the release of funds to Respondent. All the money he received from the checks he received in August, 1991, in the amount of $600.00, was paid out to Respondent for repair costs. When he subsequently received a letter from Mr. Plihcik regarding cash which Respondent claimed he had mailed directly but which was not received, Mr. Arn replied in writing that he had not authorized Respondent to either receive or disburse funds directly. The Isabelles moved out of the house in either December, 1991 or January, 1992. By that time, Respondent had done very little work on the property. Some building materials were still on the property which Mr. Plihcik said he had left there. They are sure Respondent had not provided it. Mr. Carl Carpenter, a registered contractor and home inspector examined the property in question in March, 1992 for a potential purchaser. At that time, he found the garage in the process of being converted to a room. The framing had been installed as had the windows, and the sheet rock was partially installed. There was also a small bathroom which was not operating properly. It was his opinion that the construction was progressing from garage to room, and not the opposite. Mr. Carpenter was also of the opinion that to convert the room back to a garage would cost somewhere in the range of $600.00 and should take about 2 days. It would about double that to reinstall the bath. The bath he saw on the property was old. Respondent offered an estimate to reconvert the garage from a contractor obtained in August, 1991 which showed a total price of $1,606.00. While this is substantially more than the price cited by Mr. Carpenter, whose estimate seems rather out of line, cost is not the issue. The important part of Carpenter's testimony relates to his belief that the work in progress seemed more of conversion to a room rather than return to a garage and tends to indicate Respondent had done little if any work on the property. Ms. Sutton, the Division's investigator, interviewed Respondent 3 times regarding this matter and found his statements to be inconsistent. While he claimed he had done some work on the property and had not finished it, he could not give her the exact amount he had received from the Isabelles. He also gave her a list of what he had spent the money he had received on, but had no receipts from workers or suppliers to back it up. Mr. Danly claimed he had sent cash to Mr. Plihcik but denied receiving any cash payments from the Isabelles. He claimed he gave them receipts for what they gave him, but they have no memory of receiving any. Mr. Danley takes no issue with the facts as outlined by Ms. Isabelle except as to the remodeling of the garage which he claims is not covered by the restrictions contained in Chapter 475, Florida Statutes. He claims that the payments made by the Isabelles were authorized by Mr. Plihcik to be kept by him as compensation for the repair work on the garage and not to be transmitted to Plihcik as owner because the work needed to be done and Plihcik did not have the money to pay to have it done. He also asserts that the lease was signed by the Isabelles with the requirement in it that they would help with the work as a condition of reducing the rent. He delayed starting on the remodeling until he got the money from Mr. Arn, which, at least in part, was as early as August 29, 1991. When he got that check, he started work. Originally, he states, he hired 2 young men to do the dry-wall, but the bathroom had to be framed before the dry wall could be installed. Then the water heater was installed and the power line installed for that, all of which he claims he did himself. The framing and closing up of the old door to the kitchen was done by Respondent with the assistance of a contractor. All of this, he asserts, was done in September and October, 1991, contrary to the Isabelle's claim that the only work done prior to their departure was the installation of some dry wall. Some materials were already in place but some of that had been damaged and had to be replaced. He claims he had 3 helpers to do all this work and paid them in cash. The sink was put back into its original position and he got the material to reinstall the toilet which he was unable to do because of back problems. Mr. Danley denies ever asking the Isabelles for cash or loans. He claims the only payments he received were in the form of checks payable to him or to Arn, and all money received from them was used for the work. He also admits to collecting the rent due in October which, he claims, was used for the restoration project. The only checks introduced into evidence not payable to Arn or Danley are 3 payable to Kash & Karry and of these, two are endorsed by Daniel Isabelle and one bears no endorsement at all. These are the checks which Ms. Isabelle claims were made to provide cash for Respondent at his request. Taken together, the evidence as presented by both sides tends to support Ms. Isabelle's story. Mr. Danley claims he did not finish the work because he could not find a door for the garage. He claims to have called many places but was unable to find a single garage door. A call to a Scotty's building supply store in that area revealed a single garage door was readily available, though by special order. Finally, he bought one from a builder in St. Petersburg for $235.00 which was paid in cash. The price included installation the following morning, and the site was already prepared. However, the builder never showed up with the door and he lost the payment. On balance, Respondent's account of the matter, unsupported as it is by any direct evidence beyond his own testimony, is found to be less than credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, recommended that a Final Order be issued by the Florida Real Estate Commission suspending Respondent, Paul Andrew Danley's license as a real estate salesman in Florida for a period of 3 years under such terms and conditions as are considered appropriate by the Commission; imposing a total administrative fine of $2,000.00; and imposing a reprimand. RECOMMENDED this 1st day of March, 1993, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-5598 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. & 2. Accepted and incorporated herein. 3. & 4. Accepted and incorporated herein. 5. Accepted. 6. - 8. Accepted and incorporated herein. 9. Accepted and incorporated. 10. & 11. Accepted and incorporated herein. 12. & 13. Accepted and incorporated herein. 14. Accepted and incorporated herein. 15. & 16. Accepted and incorporated herein. 17. Accepted but redundant with 4. 18. Accepted and incorporated herein. 19. - 22. Accepted and incorporated herein. 23. Accepted. 24. & 25. Accepted. 26. Accepted but not material to any issue. 27. Accepted and incorporated herein. 28. - 30. Accepted and incorporated herein. 31. - 33. Accepted and incorporated herein. 34. Accepted and incorporated herein. 35. Accepted but mot material to any issue. 36. & 37. Accepted and incorporated herein. 38. - 40. Accepted. 41. Accepted and incorporated herein. 42. Accepted and incorporated herein. 43. - 46. Accepted and incorporated herein. 47. Accepted. 48. - 53. Accepted and incorporated herein. 54. - 56. Accepted and incorporated herein. 57. Accepted. FOR THE RESPONDENT: 1. A - E. Considered more to be either argumnent on the state of the evidence or conclusions of law. Not accepted as a statement of fact as finally found. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street, Suite N-308 P.O. Box 1900 Orlando, Florida 32802-1900 Gilbert P. McPherson, Esquire 1822 Drew Street, Suite 8 Clearwater, Florida 34625 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
Findings Of Fact Roy Ahringer, hereinafter referred to as "Respondent" has held real estate broker-salesman license number 0158288 at all times material hereto. From approximately August 15, 1983 to November 20, 1983, and from approximately March 1, 1984 to April 30, 1984, Respondent was licensed and operated as a real estate salesman in the employ of Highlands Holiday Realty, Inc., a licensed brokerage Corporation. On or about August 11, 1983, Highlands Holiday Realty, Inc., obtained from Mildred M. Haydon, as owner, a six month listing to sell certain property designated as Lot 9, Block 353, Section 26 Lake Placid, at a price of "any reasonable cash offer". By the terms of this listing agreement, the listing would continue beyond the six month period "until this agreement is revoked by a ten day's written notice" delivered by the owner to Highlands Holiday Realty, Inc. There is no evidence that this listing agreement was ever revoked and it remained in effect during the time Respondent was employed at Highlands Holiday Realty, Inc. Respondent was therefore an agent for Mildred M. Haydon. While this listing agreement was in effect, Respondent obtained a sales contract on March 29, 1984, executed by Robert J. and Marjorie P. Mitchell, as purchasers, for the purchase of Mildred M. Haydon's Lot 9 at a total purchase price of $5000. On April 30, 1984, the Mitchells executed two checks totaling $5000 to Highlands Holiday Realty which were to be placed in a trust account for this transaction. The contract was initially prepared omitting the name and address of the seller but was later completed by Respondent by having a secretary at Highlands Holiday Realty Inc. type in the names of Roy Ahringer and May Ahringer as sellers. On March 31, 1984 Respondent and his wife, May Ahringer, executed a contract for sale and purchase of Mildred M. Haydon's Lot 9 for the purchase price of $2220. Mildred M. Haydon executed this contract for sale and purchase on April 4, 1984. Subsequently this transaction closed and Respondent, with his wife, purchased the subject property for $2220 on or about May 23 or 24, 1984. The evidence presented establishes that Respondent did not explain to the Mitchells or to Mildred M. Haydon that he would be purchasing the property for $2220 from Mildred M. Haydon and then reselling the property to the Mitchells for $5000. Mildred M. Hayden was not informed of the Mitchell's offer of $5000 for her lot prior to her sale of the lot to Respondent. It is Respondent's contention that he told the Mitchells he was having a problem with the lot owner and that he might have to buy it from her in order to be able to resell it to the Mitchells. However, no evidence supporting this assertion was presented by Respondent, and in any event there is no evidence that the Mitchells or Mildred M. Haydon knew about the difference in the purchase and resale prices which would have resulted from this transaction. When the circumstances surrounding this transaction became apparent to Ronald N. Weisser, broker and owner of Highlands Holiday Realty, Inc., he stopped the Ahringer-Mitchell transaction, and the $5000 paid by the Mitchells for this lot has been returned to them. Respondent still owns the subject property. Mildred M. Hayden was damaged in an amount of approximately $2780 due to Respondent's failure to present the Mitchells' offer to her. The Mitchells were damaged in an amount equal to the interest they were required to pay on money borrowed for the purchase price during the period when the funds were retained in a non-interest bearing escrow account. The parties were allowed to submit post-hearing proposed findings of fact pursuant to Section 120.57(1)(b)4, F.S. A ruling on each proposed finding has been made either directly or indirectly in this Recommended Order except where such proposed findings of fact have been rejected as subordinate, cumulative immaterial or unnecessary.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that a Final Order be issued suspending Respondent's license for a period of two (2) years and imposing an administrative fine in the amount of one thousand dollars ($1000). DONE and ENTERED this 10th day of June, 1985 at Tallahassee Florida. Hearings Hearings DONALD D. CONN, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 10th day of June, 1985. COPIES FURNISHED: James Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802 Roy Ahringer 232 Harmony Avenue Lake Placid Florida 33852 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether the Respondent's license as a real estate broker should be suspended, revoked, or the licensee otherwise disciplined, for alleged violation of Chapter 475, Florida Statutes as set forth in the Administrative Complaint dated September 3, 1981. By Notice of Hearing, dated October 26, 1981, this case was set for hearing to be held on December 17, 1981. However, on December 3, 1981, another Administrative Complaint seeking to take disciplinary action against Respondent by Petitioner's Construction Industry Licensing Board was referred to the Division. In view of the fact that both complaints alleged matters arising out of the same transaction, Petitioner's Motion to Consolidate for purposes of hearing was granted and the final hearing was rescheduled for March 10, 1982. The complaint herein alleges that Respondent, a licensed real estate broker, in her capacity as a certified residential contractor and as President of CAT Development, Inc., a construction firm, contracted to build a dwelling for Jenny Soto, and received full payment under the contract, but abandoned construction prior to completion, permitted the property to deteriorate, and has not refunded monies due the purchaser. It is therefore alleged that Respondent violated Subsections 475.25(1)(b) and (d), Florida Statutes.
Findings Of Fact Respondent Catherine W. Grabhorn is a licensed real estate broker, doing business ads CAT Realty Company at East Palatka,Florida. She was so licensed at all material times alleged in the Administrative Complaint. (Testimony of Respondent) Respondent is also a certified residential contractor operating as CAT Development, Inc. at East Palatka, Florida, and was so licensed at all material times alleged in the Administrative Complaint. (Testimony of Respondent) In October, 1978, Jenny Soto, Bronx, N. Y., accompanied other prospective land purchasers to Palatka, ,Florida, where she was shown and purchased a lot for $10,000 at a development known as P & B Ranchettes. The group had traveled to Florida in a van. After the land purchase, the driver of the van took Soto and the others to Respondent's combination real estate and construction firm office where Respondent showed the group a catalog of various homes for possible construction on the lots which had been purchased. Soto saw a split level design that she liked, and Respondent told her that she could build it for $43,000, with the garage and the below ground level part of the split level to be unfinished, and without appliances. A contract was entered into between Respondent as President of CAT Development, Inc. and Soto on October 22, 1978. The contract provided for payments of $13,000 on October 24th, $25,700 on November 12th and the balance of $4,300 due on completion of the house. However, no completion date was stated in the contract. (Testimony of Respondent, Soto, Petitioner's Exhibits 16-19) On October 24, 1978, Respondent flew to New York City to obtain the initial payment under the contract. Soto met her at the airport and paid $13,000. At that time, Soto asked Respondent when house construction would commence, and Respondent indicated that she needed additional money for materials. On November 30, 1978, the parties entered into a new contract to add additional features to the house, including a finished downstairs and garage, and appliances. The new contract price was $47,600, which reflected that $13,000 had been paid, $20,000 was due on December 1, 1978, $10,000 due on January 15, 1979, and the balance of $4,600 due on completion of the house. Again, no time for completion was stated in the contract. Pursuant to the agreement, Soto paid Respondent $20,000 on December 1, 1978 in New York City where the contract was signed. At some undisclosed date thereafter, Soto decided she wanted to upgrade the carpeting and appliance allowances, and the parties entered into an oral agreement for a total contract price of $53,000. (Testimony of Respondent, Soto, Petitioner's Exhibits 19-22) On January 4, 1979, Respondent obtained a Putnam County building permit for the Soto project, and plumbing and electrical permits were obtained by subcontractors later that month. Construction commenced on the house and it was discovered that the ground water table was close to the surface of the land and that there would be drainage problems. However, Respondent told Soto that she would be able to cure the problem by pumping out the standing water in the area. On January 26, Respondent again went to New York and obtained a $10,000 payment from Soto. In February, Soto visited the construction site and observed that standing water near the house was "like a lake". Soto visited the house again in March and gave Respondent the final $10,000 payment on the contract price. At that time, the house was substantially completed and there was no apparent water damage. Respondent told Soto that it would take a couple of months to finish construction. It appeared to Soto then that the only remaining work to be done was to install carpeting, light fixtures, and appliances. Several county inspections were made as the work progressed during January and February, 1979, and it was determined, after certain minor corrective measures, that the work was being performed satisfactorily. (Testimony of Durbin, Michaels, Soto, Respondent, Petitioner's Exhibits 1-3, 23-24) During ensuing months, Soto periodically telephoned Respondent to ascertain when the home would be completed, and on these occasions Respondent promised that the house would be completed within thirty days. However, no further work has been done by Respondent, except to obtain approval of a temporary electrical pole in June, 1981. At that time, the county building inspector observed that there was a considerable amount of standing water around the house, and that the outside of the building had deteriorated. Siding was warped and pulled away, the front door was open, and some wrought iron was located in a nearby ditch. (Testimony of Soto, Resondent, Durbin, Petitioner's Exhibit 3) In response to a request by Soto in 1980 concerning the market value of the house, Respondent wrote her on July l, 1980 that the home was 90 to 95 percent complete and that completion was anticipated "as soon as possible". On May 28, 1981, the building permit was extended by the county to August 31, 1981. In July of that year, Soto visited the property and observed that a lock was missing from the door, mud was present in the lower level, sheetrock on the walls had rotted out, and the kitchen cabinets were missing, apparently due to vandalism. Soto saw the Respondent and asked her why the property was in that condition, and Respondent told her that she had no money because workmen on the project whom she had paid had "run off" with the money. During this visit, Respondent provided Soto with a written statement that the said house would be completed within sixty days, which would be September 20, 1981, unless prevented by "some act of God". (Testimony of Respondent, Soto, Michaels, Petitioner's Exhibits 14, 15, 25) On September 1, 1981, the county building official wrote to Respondent and advised her that the permit extension had expired the previous day and that new permits would be required to complete the work. The letter also stated that if substantial work was not evident within ten days from her receipt of the letter, he would be forced to conclude that she had effectively abandoned the project and he would bring the matter to the attention of the county contracting board, and to the Florida Construction Industry Licensing Board. Complaints by Soto to the building official of Putnam County resulted in a letter written to him on January 14, 1982 by Respondent wherein she stated that she had not been able to do anything about the Soto house due to her financial situation, but that she hoped to be able to finish the project in thirty to sixty days. (Testimony of Michaels, Petitioner's Exhibits 10, 11) On February 48, 1982, the county building officials went to the project site and found further evidence of deterioration, but no indication that any corrective or preservative work had been accomplished. Doors and windows were missing from the house, siding and fascia board were warped and pulled away, and several panels fallen from the side of the house. A ditch had been dug around the house and there was standing water in it. Inside, it was observed that gypsum board had been removed from the walls, and in the lower level water stains were evident sixteen to eighteen inches above the flooring. Roof trusses had been broken and structural integrity had deteriorated with rotted 2 x 4 lumber forming bearing walls. It was further noted that kitchen cabinets had been removed from the property. (Testimony of Durbin, Michaels, Petitioner's Exhibits 4-9) Although construction of the house was substantially completed at the time Respondent ceased work, the remaining cost of installing heating and air conditioner units, kitchen appliances, washer/dryer, bathroom and lighting fixtures, pump for septic tank, and carpeting is estimated at approximately $13,000. Additionally, to correct the present deficiencies and procure new windows, kitchen cabinets, and other vandalized property, would require a substantial, but unknown additional cost. Respondent estimates that it would take about $10,000 to $15,000 to complete the house. (Testimony of Michaels, Respondent) Since commencing construction on the Soto house in January, 1979, Respondent has obtained permits and completed construction on nine single family homes, the last permit being issued as recently as January 20, 1982. No complaints have been received by the Putnam County building department on these projects. (Testimony of Michaels, Petitioner's Exhibit 12) Respondent testified at the hearing and conceded that she had not completed the Soto house, but attributed her failure to "cash flow" problems which had resulted in financial inability to complete the work. Respondent had deposited all of the money paid to her by Soto in her general banking account. This account was used for expenditures on the Soto house, as well as other concurrent projects. Respondent produced a statement of expenditures on the Soto house in the amount of $47,000. However, this statement reflected that Respondent had included airplane fare for two trips in the total amount of $434,. These trips were made to pick up checks from Soto in New York. Respondent stated that other costs for fill, construction of a ditch, and rock would not have been necessary if she had followed later advice as to the water problem on the property, and installed a sump pump and "french" drains. She further stated that on various occasions she would lock the house, but each time when she went back the locks would have been stolen, and that although she reported vandalism to the police, the problem continued. Respondent admitted that she had made promises to Soto to complete the house which she had not kept, but that she had never intended to take her money and not perform the work under the contract. She underestimated the cost of building the house due in part to her unfamiliarity with the particular design of the Soto house. (Testimony of Respondent, Petitioner's Exhibits 13, 29)
Recommendation That Respondent's license as a real estate broker be suspended for a period of six months. DONE and ENTERED this 25th day of May, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM 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 25th day of May, 1982. COPIES FURNISHED: James Quincey, Esquire Post Office Box 1900 Gainesville, Florida 32602 William N. Gambert, Esquire 630 North Wild Olive Avenue Daytona Beach, Florida 32018 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= MEMORANDUM December 8, 1982 TO: Harold Huff, Executive Director, Florida Real Estate Commission; Gail Rodrigues, Chief Investigator; Darlene Keller, Administrative Assistant; Renata Hedrick FROM: John Huskins, Staff Attorney SUBJECT: Final Commission Action Case No. 0011848 Catherine W. Grabhorn 0033021-1 DOAH Case No. 91-2491 You are advised that by Final Order entered July 15, 1982, the Commission ordered Respondent's license revoked (copy attached); and the Respondent took appeal from this ORDER, and that on November 9, 1982, the District Court of Appeal entered its ORDER dismissing the appeal (copy attached). Accordingly, the Commission's ORDER of revocation became effective November 9, 1982. CLOSURE CODE: PLOO Catherine W. Grabhorn, broker, Palatka, Florida; Revoked, effective November 9, 1982; fraud, misrepresentation, conceal- ment, false promises, dishonest dealing, culpable negligence, breach of trust. Attachments cc: Sandy Maston w/file Randy Schwartz JH/DM
Findings Of Fact For the purposes of the motion, the parties stipulated to the following facts: The Department's action giving rise to Petitioners' petition for attorney's fees under Section 57.111, Florida Statutes, was to propose confirm a report of abuse/neglect against each of the five Petitioners in their individual capacity. Each Petitioner requested a formal hearing under Section 120.57(1), Florida Statutes, which resulted in five separate cases, none of which named Palmetto Guest Home, Inc. as a party. The five cases were consolidated but were subsequently dismissed as a result of the Department downgrading each case to "closed without classification". All five of the Petitioners worked at the Palmetto Guest Home, Inc. and are related to each other. The Palmetto Guest Home, Inc., is a Florida corporation in good standing and registered with the State of Florida as an adult congregate living facility. James E. Biggins is the president and a director of Palmetto Guest Home, Inc., and is the corporation's sole shareholder. Palmetto Guest Home, Inc., was not named as a party in the underlying administrative action and is not one of the Petitioners in this case. James E. Biggins was not named as an alleged perpetrator in the underlying administrative action and is not one of the Petitioners in this case. James E. Biggins is the father of Petitioners, K.B., J.J.B. and M.B., who are vice presidents of the corporation. James E. Biggins is the husband of Petitioner S.B., who is a director and the secretary/treasurer of the corporation. James E. Biggins is the father-in-law of Petitioner T.B., who is the administrator of Palmetto Guest Home, Inc. Palmetto Guest Home, Inc. has net a worth of less than two million dollars.
Findings Of Fact On July 24, 1986, Key Sand Associates, Ltd., by and through its agent, Eduardo Avila, made an application for a variance to the height limitation under the Code to allow a 145 foot building for 26 residential units, as described in plans submitted as part of the application. A public hearing was set before the Development Code Adjustment Board (DCAB) for August 28, 1986. There was no evidence that notice was not published in the newspaper as provided by the Code or was not mailed to the owners of the adjacent properties within 200 feet of the subject parcel as shown by the latest ad valorem tax records. On August 28, 1986, a public hearing was held before the DCAB at the time and place set forth in the notice. At the time of the hearing, minutes were kept and a tape recording was made. The tape recording and minutes of the hearing reveal that the DCAB heard the testimony of: a planning official; Eduardo Avila, representing the applicant; Y. H. Lee, architect, representing the applicant; Mr. Carl G. Myers, President of the Sand Key Property Owners Association, an opponent; Sam Dervish, representing the adjacent property owner, Dervish Bros. Gallery Restaurant, an opponent; and, Ed Armstrong, an attorney representing the interests of the developer of the adjacent property of Crescent Beach Club I, an opponent. Two letters in opposition were read into the record. At the conclusion of the public hearing before the DCAB, the DCAB found that the requirements for the variance under Section 137.012 of the Code had been met and granted the variance, as requested, by a vote of 4-1. 1/ On September 10, 1986, the appellant, Walt Buchholz, filed a notice of appeal with the City Clerk under the procedure provided in Section 137.013 of the Code. The notice of appeal alleged that Buchholz is "a resident and owner of unit 16A, 1340 Gulf Blvd., Clearwater, Florida," adjacent to the subject parcel. It further stated that the bases of the appeal were: (1) that the present owners of the adjacent property were not notified although the developer was; (2) that the applicant had misrepresented the facts at the hearing related to a representation about a blank wall on the condominium building in which Buchholz owned property; and (3) the naviety of the DCAB related to a display of model buildings by the applicant at the hearing. A hearing on the appeal was set for January 23, 1987, and appropriate notice given. The appeal hearing was continued from December 29, 1986, to January 23, 1987, on Appellant's motion to enable Buchholz to be present at the hearing on the ground: "Appellant's presence at a hearing in this case is necessary for Appellant's testimony is essential to support his position." The conduct of the appeal hearing was in accordance with Section 137.013(e) of the Code. At the appeal hearing on January 23, 1987, the hearing officer accepted the record on appeal which had been transmitted by the City Clerk to the Department of Administrative Hearings on September 19, 1986, consisting of seven items, as required by Section 137.013(e)(2)a. of the Code. The appellant did not present any witnesses nor introduce any evidence in support of the issues raised in his notice of appeal during the presentation of his case. 2/ However, the appeal hearing reflected a concession by Key Sand that Buchholz owns a condominium unit in the Crescent Beach Club, less than 200 feet from the subject property, and did not receive notice because the City Clerk sent the notice to the owner according to the latest ad valorem tax roll, the developer of the Crescent Beach Club. Appellant's counsel argued that failure to provide notice to owners of adjacent property who became owners of the property after the publication of the last ad valorem tax roll was a procedural impropriety. Appellant's counsel argued that the applicant had not presented sufficient evidence to support any of the required standards for approval of a variance at the August 28, 1986, hearing as required by Section 137.012 of the Code. Key Sand argued that Appellant was not a party in interest as required under the Code, in that, (1) there was no showing that appellant was an adversely affected person with a definite interest exceeding the general interest shared by the rest of the community and (2) being a person who owns property within 200 foot of the subject property does not by itself prove an adverse interest to his property in granting the variance. Appellant did not present even any argument during his case related to the second and third items of appeal set forth in the notice of appeal filed in this matter. Appellant did not prove that the DCAB was deceived by the passing reference to a "blank wall" during the DCAB hearing or that the DCAB naively was deceived by the models displayed at the hearing. To the contrary, the record on appeal reflects that the DCAB was not deceived by the reference to a blank wall" and that the DCAB critically weighed the display models along with all the other evidence.
The Issue Whether Respondents committed the violations alleged in the Notice to Show Cause.
Findings Of Fact Sandy Key Properties, Ltd., is the developer of Sandy Key, a condominium (Sandy Key). Thomas S. O'Rorke and Marion L. Bradford are general partners of Sandy Key Properties, Ltd. Sandy Key was meant to be a 244 condominium project consisting of four buildings with 61 units each. The condominium project was to be built in four phases, with each phase representing one building. Only three phases of the condominium project were built, however, consisting of 183 units. The ninety-second unit was sold on January 19, 1984. Control of the Owners Association Until September 1, 1984, the Respondents elected a majority of the board of directors of the Sandy Key Owners Association (Association). Up until then the board consisted of three directors: Thomas S. O'Rorke, Marion L. Bradford and Richard Douglas, who was a unit owner and Respondent's employee. On September 1, 1984, the Association held its annual meeting. At the meeting, the unit owners decided to increase the membership of the board of directors to five. The three sitting directors were reelected and two unit owners were added to the board. The Respondents did not vote their units at the election. On March 9, 1985, Mr. Douglas was replaced on the board by Bob Jackson. Mr. Douglas no longer worked for Respondents and Mr. Jackson was taking over Mr. Douglas' duties as Respondent's employee. During the time he served on the board, Mr. Douglas followed the orders given by Mr. O'Rorke. At the annual meeting held on September 14, 1985, the board's membership was increased from five to seven. The five sitting directors were reelected and two more unit owners were added. Respondents voted their units. On March 31, 1986, Mr. Jackson resigned from the board and was replaced by Mr. Douglas. At the annual meeting held on September 13, 1986, Mr. Bradford stated "that he and Mr. O'Rorke were not nominated to the board by the nominating committee since they automatically become board, members because they are the developers of Sandy Key." Petitioner's Composite Exhibit 1; Minutes of September 13, 1986 meeting. Five unit owners were also elected to the board. Two of the unit owners, Mr. Lassen and Mr. Putnam were also limited partners of Sandy Key Properties, Ltd., and Mr. Putnam was the developer's CPA. Respondents voted their units at the meeting. At a recall election held on May 2, 1987, Mr. O'Rorke was reelected and six new directors were elected. The six new directors were unrelated to the Respondents. Mr. O'Rorke was President of the Association from March 1983 to September 1985 and from September 1986 to May 1987. For those same periods, Mr. Bradford was Vice-President. From September 1985 to September 1986, Mr. Bradford was President and Mr. O'Rorke was Vice-President. Throughout the period beginning in 1983 and ending on May 2, 1987, Mr. O'Rorke and Mr. Bradford controlled the Association. Even though the majority of unit owners were allowed to elect the board of directors, Mr. O'Rorke asserted on numerous occasions that the developers were still in control of the Association. This assertion was based on Mr. O'Rorke's belief that the applicable law allowed him to retain control of the Association because he planned to build Phase IV of the project consisting of 61 units. The nondeveloper unit owners acquiesced in the assertion of control by Respondents until May 2, 1987. Until then, the unit owners believed that Respondents were in control and everyone acted accordingly. Prior to May 2, 1987, Respondents never relinquished control of the Association and the unit owners never accepted control of the Association. Up to the date of the hearing, Respondents had not delivered to the Association all the items required to be delivered by Section 718.301, Florida Statutes. One of the items Respondents never delivered is the review of the Association's financial records by a Certified Public Accountant required by Section 718.301(4)(c), Florida Statutes, and Rule 7D-23.003, Florida Administrative Code. Guarantee and Assessments At the hearing, the parties stipulated that the initial "guarantee period" ended on June 30, 1983. The "guarantee period" is that period of time, pursuant to Section 718.116(8)(a)2., Florida Statutes, wherein the developer obligates himself to pay any amount of common expenses which exceeds the assessments for common expenses imposed on other unit owners. In return for the guarantee, the developer does not have to pay assessments on the units it owns. On June 30, 1983, the Association reserve accounts were underfunded by $1,564.05. After June 30, 1983, Respondents did not pay assessments on developer- owned units as required of other unit owners. At the hearing, the parties agreed to stipulate to the amount of assessments Respondent should have paid from June 30, 1983, to December 16, 1986, and to file the stipulation after the hearing. The parties, however, were unable to reach agreement and a stipulation was not filed. The disagreement between the parties is over whether the assessment liability is $91,141.48, as asserted by Respondents, or $93,231.86, as asserted by Petitioner. From the evidence presented at the hearing, the assessments that should have been paid by Respondents from June 30, 1983, to December 16, 1986 total $91,141.48. For assessments paid more than ten days late, interest in the amount of 12 percent per annum from the date the assessment was due should also have been paid. Also, assessments not paid within ten days of the date due are subject to a $10 late fee. Petitioner's Exhibit 2, at p.10. Even though the Respondents did not make assessment payments to the Association in a formal and timely manner, Respondents continued to pay for Association expenses on a sporadic and as needed basis. From the evidence presented, however, one cannot determine the amount of these payments nor how to properly offset them against the assessments that Respondents failed to timely pay and against the interest and late fees that accrue to each unpaid assessment. As of December 16, 1986, the Association's reserve accounts were underfunded by $26,271.61. Financial Reports, Annual Meetings The Association did not mail or deliver to all unit owners a financial report for the year 1985 within 60 days following the end of the year. The Association did not call or hold an annual meeting of unit owners for the year 1983. The Association did not mail copies of proposed budgets and budget meeting notices, and did not hold budget meetings for the years 1984 and 1985. The Association failed to maintain its records according to good accounting practices prior to August 1986. During 1986, the Association imposed and collected a $50 per unit special assessment for shrubbery replacement. This assessment was first approved by the unit owners. Each unit owner's share of the common elements is 0.52 percent for a two-bedroom unit and 0.6208 1/3 percent for a three-bedroom unit.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Respondents be fined $100 for violating Section 718.115(2), Florida Statutes; Respondents be fined $2,500 for violating Section 718.116, Florida Statutes; Respondents be fined $1,000 for violating Section 718.112(2)(f) , Florida Statutes; Respondents be fined $1,000 for violating Section 718.111(13) , Florida Statutes; Respondents be fined $500 for violating Section 718.112(2)(d) , Florida Statutes; Respondents be fined $1,000 for the violations of Section 718.112(2)(e) Florida Statutes; Respondents be fined $500 for violating Section 718.111(12)(,a)11., Florida Statutes; Respondents be fined $2,500 for violating Section 718.301, Florida Statutes; and Respondents be ordered to have prepared the review of financial records required by Section 718.301(4)(c), Florida Statutes. DONE and ENTERED this 15th day of March, 1989, in Tallahassee, Leon County, Florida. JOSE A. DIEZ-ARGUELLES Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March 1989. APPENDIX Rulings on Petitioner's Proposed Findings of Fact 1-4. Accepted. 5-6. Rejected as recitation of testimony. Not a finding of fact. Accepted. 9-11. Not a finding of fact. Accepted. Accepted, except portions that are argument. Also, some of these proposed facts are subordinate to facts found. Accepted generally. Not a finding of fact. 16-19. Accepted generally. Not a finding of fact. Accepted generally. Accepted. 23-32. Accepted generally; subordinate to facts found. Rulings on Respondents Proposed Findings of Fact Rejected as not supported by the weight of the evidence. First sentence accepted. Second and third sentences rejected. While the evidence establishes that Respondents paid some amounts, it cannot be determined what amounts were paid for association expenses. First sentence accepted, except as to phrase that unit owners had control. Second sentence rejected. Rejected. Accepted. First sentence accepted. Second sentence rejected. Accepted. Rejected. First sentence accepted. Second sentence rejected; the turnover review would help Respondents establish any offsets they may be entitled to. Accepted. Rulings on Intervenor's Proposed Findings of Fact 1-2. Accepted. 3. Not a finding of fact. 4-5. Accepted generally. 6-7. Rejected as argument. 8. Accepted. 9-11. Not a finding of fact. 12-13. Accepted. 14. Argument. 15-16. Accepted generally. 17-19. Not a finding of fact. 20. Accepted. 21-23. Not a finding of fact. 24 Accepted. Accepted but subordinate to facts found. First sentence is not a finding of fact. Second sentence accepted. 27-34. Not findings of fact. 35-37. Accepted but subordinate to facts found. COPIES FURNISHED: Karl M. Scheuerman, Esquire Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Thurston A. Shell, Esquire Post Office Box 1831 Pensacola, Florida 3259 Steven E. Quinnell, Esquire and Gregory D. Smith, Esquire Post Office Drawer 1832 Pensacola, Florida 32598 E. James Kearney, Director Division of Florida Land Sales, Condominiums and Mobile Homes 725 South Bronough Street Tallahassee, Florida 32399-1007 Van B. Poole, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
Findings Of Fact The Petitioner is a Florida corporation, which is a wholly owned subsidiary of United States Industries, Inc. Center Sand Company and Eustis Sand Sales are divisions of the Petitioner. They are not separately incorporated. Petitioner is in the business of mining and hauling sand. It leases and operates the Center Sand Mine. It makes profits from the sales of sand, and by serving as a broker for individuals who contract with the Petitioner to transport the sand. The Petitioner has one sales tax number. The Petitioner maintains a single price list for its sand. The price list does not include the cost of hauling the sand. Some purchasers send their own trucks to the Petitioner's mine to pick up the sand. Other purchasers transport the sand by common carrier. Approximately seventy-five to eighty percent of the sand is hauled by "lease operators" or "contract carriers". These operators own their own trucks, and contract with the Petitioner to exclusively haul Petitioner's sand. The Petitioner handles payroll, insurance and taxes far the lease operators, and maintains a lease payroll which is based on the tonnage of sand hauled by the lease operator. The Petitioner collects a brokerage commission from the lease operators which ranges from twelve and a half to twenty-seven percent, depending upon whether the operator owns his or her own trailer, or uses one of the Petitioner's trailers. In transactions in which a purchaser utilizes its own carriers, or common carriers, the Petitioner submits a single invoice to the purchaser which reflects the price of the sand. In cases in which the Petitioner's lease operators do the hauling, the Petitioner submits two invoices to the purchaser. One invoice reflects the price of the sand. The other reflects the freight charges of the contract operator. Some purchasers satisfy the two invoices with a single check, others issue two checks. Whether one or two checks are submitted, the Petitioner maintains separate receipt books for sand and for freight. Invoices, whether for sand or freight, are generally issued in the name of Center Sand Company or Eustis Sand Sales. The Petitioner collects sales taxes from its customers for sales of sand. The Petitioner does not collect sales tax on freight charges. The Petitioner and the Department submitted copies of numerous purchase orders, and invoices into evidence. Invoices reflecting all of the transactions involved in the audit were not submitted. Some of the purchase orders and/or invoices reflect that the sales are "f.o.b. origin". F.o.b. literally means "free on board" and refers to the location at which title to goods being bold transfers from the seller to the purchaser. Other purchase orders and/or invoices reflect that the sales are f.o.b the purchaser's place of business. Most of the Petitioner's sales are arranged by telephone conversations with no written purchase order. In these transactions, and even in most transactions in which there are purchase orders, neither the purchase order nor the Petitioner's invoices reflect whether the terms of the transaction are f.o.b. origin or f.o.b. purchaser's place of business. The evidence is undisputed that in these transactions in which the documents do not reflect the precise terms of the transaction, the Petitioner and its customers have treated the sales as if they were f.o.b. origin. In other words, they treated the transactions as if ownership of the sand transferred at the Petitioner's mine. This is generally the practice in the Petitioner's industry, and is consistent with the Petitioner's price quotation and billing practices. The Petitioner has conducted its business in this manner, and collected sales taxes only on the price of the sand for many years. The Petitioner was audited by the Department in 1973, and was assessed for numerous items. It was not assessed for sales taxes on freight. Loads of sand are occasionally lost between the Petitioner's mine and the purchaser's place of business due to an accident or other cause. Generally when this occurs the Petitioner replaces the load of sand. This policy does not reflect that title to the sand has not yet transferred to the purchaser. The cost of a load of sand is somewhat negligible, generally less than twenty dollars, and the Petitioner is willing to replace a load in order to maintain good will with its customers. The Department's audit and proposed assessment covers the period from June 1, 1975 through May 31, 1978. The total amount of the proposed assessment is $12,933.98. Of this amount, $2,213.12 is listed in "Schedule B" of the proposed assessment. The Petitioner does not contest this portion of the assessment. The amount of allegedly due taxes set out in Schedule A of the proposed assessment is $8,853.02. The Department contends that the Petitioner should have collected sales taxes on its freight charges, and $7,133.00 of the Schedule A taxes relate to the disputed freight items. The Petitioner does not dispute the remainder of the taxes set out in Schedule A, $1,720.02, or penalties and interest on that amount. The Petitioner does contend that it is not liable for taxes on the freight charges.
