Findings Of Fact The Department is the agency charged with the responsibility to prosecute violations of Chapter 475, Florida Statutes, allegedly committed by real estate brokers who are licensed in Florida. At all times material to these proceedings, Respondent Anglickis was a licensed real estate broker, having been issued licensed number 00001869 through the Division of Real Estate. Respondent American was a corporation registered as a real estate broker, having been issued license number 0169478. Both licenses were issued to the following address: 102 East Leeland Heights Boulevard, Lehigh Acres, Florida 33936. Respondent Anglickis was the qualifying broker for Respondent American, and held the office of president within the corporation. On April 19, 1989, the Respondents' accounting records were reviewed in a random, routine audit conducted by an investigator with the Division of Real Estate as part of the agency's regulatory functions. During the audit, the investigator determined that Sun Bank Account No. 013684, which was maintained by the Respondents in order to hold funds entrusted to them in pending real estate transactions, contained an overage of $9,639.83. According to the real estate company's records that were presented to the investigator, these funds were not being held for the benefit of any parties to any pending real estate transactions. At hearing, the Respondents' presented evidence to show that the funds in question in this particular trust account had been deposited as part of a number of pending real estate transactions involving installment lot sales from May 1986 through December 1986. During this time period, Respondent Anglickis was handling the bookkeeping matters within the company. He undertook this responsibility until he was able to find a replacement for the previous bookkeeper, who left on short notice. All the disbursements of funds were made on behalf of the buyers and sellers in the installment lot sales transactions except for the commissions belonging to the Respondent American. These funds were left in the trust account by Respondent Anglickis. When the new bookkeeper was hired, she reconciled the accounts every month from the time she came to the real estate company. The $9,639.83 was carried forward every month, and was never discussed again once the bookkeeper learned the money belonged to Respondent American early in her employment. This resulted in the isolation of these funds in the pending sales escrow account even though the sales had been completed and the files were considered as closed files within the office. By the time the evidence was presented at the administrative hearing, the Respondents had gone through the closed accounts involved in the installment lot sales during the period in question during 1986. The overage was shown to be the amount due to Respondent American for commission from these sales. These funds were then removed from the pending sales escrow account. Interest Bearing Sales Escrow Account In addition to the sales escrow/trust account at Sun Bank, the Respondents maintained an interest bearing account for the same purpose at the First Federal Savings and Loan Association of Fort Myers, Account No. 101222355. Unless a real estate client specifically allowed the Respondents to place the funds involved in a pending sale into an interest bearing account, they were required to place the funds in a non-interest bearing escrow account. In order for the Respondents to receive the interest on the money, full disclosure in writing had to be presented to the client, and written consent had to be obtained and documented. During the review of the Respondents' files and records relating to funds within the interest bearing sales account during the audit, the investigator was unable to locate the necessary disclosure forms for three clients whose funds were placed in the interest bearing account. When the investigator informed Respondent Anglickis of the real estate company's failure to comply with the disclosure requirements on the three pending contracts, the Respondent Anglickis indulged in a verbal tirade. It appeared from the evidence that this tantrum was unsuccessfully staged in order to either dominate or intimidate the young female investigator. During his harangue, the Respondent Anglickis said he would have his friend Harry Powell sign and backdate the required disclosure that was missing from Mr. Powell's file. The Respondent planned to then conveniently "find" the document misfiled in another file. Once he proposed this course of misconduct, the Respondent taunted the investigator concerning her inability to do anything about it if he chose to solve the problem in this manner. On her return visit to the offices on May 3, 1989, the investigator was presented with a copy of the required disclosure form for Harry Powell. The Respondent Anglickis informed the investigator that the agreement had been misfiled and was located in another file belonging to Mr. Powell. Mr. Harry Powell signed the disclosure statement during the actual sales transaction, as set forth on the form. In spite of his ongoing business relationship with Respondent Anglickis, he never backdated this disclosure, nor was he asked to do so by anyone at anytime. Charles Tucker, the real estate salesman with Respondent American who handled Mr. Powell's real estate purchase, had the client sign the disclosure statement during the sales transaction. This is a required sales procedure within the company. The bookkeeper located the disclosure in another closed file belonging to Mr. Powell within the real estate company. Mr. Powell purchased distressed properties within Lehigh Acres on a routine basis and had a number of closed files within the office. One of the other disclosure forms for a different client was sent to the title insurance company along with other documents. It was returned to Respondent American after the audit and was placed in the proper location. This form had been timely signed by the clients and allowed the Respondents to place the funds in the interest bearing account. The third and final missing disclosure form was in the possession of the real estate salesman who had it signed by the client before the escrow funds were placed in the interest bearing account. While the sales personnel are required to maintain a duplicate file, the office file in this case had not yet received the disclosure form from the salesman when the audit occurred. The Respondent Anglickis did not participate in any misconduct in order to advance the scheme he had proposed to the investigator during his tantrum. The Department's decision to prosecute the Respondents in this proceeding was proper due to the way in which the Respondent Anglickis' proposed scheme to circumvent the findings of the audit coincided with the later presentation of the missing disclosure statements.
Recommendation Based upon the foregoing, it is recommended that Respondent Anglickis and Respondent American be found not guilty of Counts I-VII as set forth in the Administrative Complaint, and that the charges be dismissed. RECOMMENDED this 26th day of June, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 26th day of June, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-5414 Petitioner's Proposed Findings of Fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See HO #2. Accepted. See HO #2. Accepted. See HO #3. Accept that during the audit, the records pur- portedly revealed an overage in the escrow account. See HO #4. The bookkeeper's statements are rejected as uncorroborated hearsay. Accepted. See HO #8 - #10. Accepted. See HO #11 and #12. Accepted. See HO #13. However, the investigator is not the ultimate trier of fact and did not have all of the evidence presented to the Hearing Officer which refuted that the proposed misconduct by Respondent Anglickis had occurred. See HO #19. Respondent's Proposed Findings of Fact are addressed as follows: Accepted. See HO #15 - #18. Accepted. See HO #4 - #7. COPIES FURNISHED: Steven W. Johnson, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Robert P. Henderson, Esquire 1619 Jackson Street Post Office Box 1906 Fort Myers, Florida 33902 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller, Executive Director DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact At all times relevant hereto, Phyllis A. Crosby, Respondent, was registered as a real estate broker by the Florida Board of Real Estate, and was qualifying broker for Crosby Realty Corporation, a corporate real estate broker (Exhibit 4). Crosby had actual knowledge of the hearing scheduled to be heard September 3, 1986, and failed to appear. William Nolte and Marilyn Nolte owned a duplex in Tampa, Florida that they desired to sell. They talked with Wade Black and Dale Peterson, real estate salesmen with American Realty Company, and agreed to give American Realty Company an exclusive right of sale agreement, a listing agreement to list the property for rent before sale, and to pay a $100 commission for each tenant. The exclusive listing agreement dated February 26, 1985 was attached to Exhibit 2, deposition of Marilyn Nolte, as Exhibit 2. Pursuant to these agreements, tenants for each of the apartments were obtained and a buyer for the property was subsequently found. In March 1985, Crosby purchased American Realty's assets which included the Nolte agreements. Salesmen licenses of Black and Peterson were transferred to Crosby Realty. Rental and deposit checks from the two tenants, totalling $1,130.00, were obtained by Black and/or Peterson and delivered to Respondent. This money was never deposited into Respondent's escrow account. The Noltes demanded remittance of the $1,130.00 minus $200 (commission), or $930.00 from Respondent on numerous occasions and made numerous phone calls to the Crosby Realty Company office to obtain this money without success. On March 13, 1985, a buyer for the Nolte property was secured by Tam- Bay Realty, and the property was sold with the closing taking place June 9, 1985. Prior to the closing, Nolte wrote to the American Title Company, who closed the transaction, regarding the $930.00 owed Nolte by Respondent and this $930.00 was deducted from the commission paid Respondent. At the closing, Respondent appeared, took the check representing Crosby Realty's Commission less the $930.00 deducted to pay Nolte, and left before the final papers were signed. No commission for the rentals of the sale was ever paid by Respondent to Black or Peterson. Respondent, during 1985, had three accounts in the Citrus Park Bank in Tampa. One was the Crosby escrow account, one was the Crosby Realty general account, and one was the Phyllis A. Crosby personal expense account. Numerous overdrafts were drawn on the general account and personal expenses account and the bank notified the Respondent that these overdraft charges would be deducted from her escrow account as a set-off to keep the bank from losing money because of these overdraft charges. During June 1985, the bank debited the escrow account $88.50 (debit memo Exhibit 1), the July statement contained a debit memo of $283.00, and in August, debit memos of $126.76 and $62.88 appeared. In September 1985, Citrus Park Bank closed all of Respondent's accounts. On April 29, 1985, Respondent leased office space and a townhouse from Carlton Properties in Tampa. She signed a three-year lease effective May 1, 1985, which provided for two months free rent for the office, with tenant to make a security deposit in the amount of $817.79 (which equals one month rent) due June 1, 1985. This deposit was never made and she was evicted in July. The townhouse lease provided for two weeks free rent with the security deposit due May 15, 1985. Respondent made this payment and one additional payment, but the check for the second payment was returned marked insufficient funds. She was evicted July 22, 1985. Respondent leased office space on July 9, 1985, from Ayers-Siera Insurance Association in the Carrolwood Village Center for a broker's office. She gave the lessor a check for $842.00 for the August rent and a security deposit. She moved into the office space and the check, written on the Crosby Realty general account, bounced. It was returned for collection twice, marked insufficient funds. When run through a third time, the check was returned marked "account closed." Eviction proceedings were instituted and Respondent's furniture was moved out of the office by the Sheriff in early October. The lessor has never received any monies from Respondent. In September or early October 1985, Respondent entered into a three year lease agreement with Paramount Triangle to lease office space commencing November 1, 1985. She moved her offices into that space and occupied the premises until April or May 1986 when she departed. During the period that Respondent occupied this office space, only one rental check from her was honored by the bank. Numerous checks given to Paramount Triangle for rent were not honored by the bank. Finally, the last check from Respondent dated March 6, 1986, which Paramount Triangle tried to deposit, was returned showing the account on which the check was drawn was closed on March 4, 1986. Pamela Glass was employed as a secretary by Respondent from July 6, 1986 through August 6, 1986. During this period, Respondent refused to accept certified mail and became very angry with Glass when she once signed for a certified letter addressed to Respondent. Glass received numerous phone calls from people complaining about not being paid for billing sent to Respondent. When her pay was not forthcoming at the end of the month, Glass quit. Glass also testified, without contradiction, that Respondent held accounts for utilities under various aliases she used for this purpose. Frank Maye, investigator for Petitioner, failed to get escrow account records from Respondent when requested and made appointments with her to audit her escrow accounts which were not kept by Respondent. Failing to obtain the records from Respondent, Maye subpoenaed the records from the bank.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent, John P. Wickersham ("Wickersham"), is licensed as a real estate broker under license number 0095775. Respondent, Aladdin Real Estate of Rockledge ("Aladdin"), is a Florida corporation registered as a real estate broker under license number 0213244. Wickersham is the qualifying broker and corporate officer for Aladdin. Respondents maintain their escrow account at the Barnett Bank of Cocoa. On April 28, 1994, Ms. Marie Ventura, Petitioner's investigator, audited Respondents' escrow account. Ms. Ventura concluded that Respondents' escrow account had a liability of $46,287.30 and a reconciled balance of $43,557.26. Ms. Ventura concluded that Respondents' escrow account had a shortage of $2,730.04. Respondents provided Ms. Ventura with additional information. On May 16, 1994, Ms. Ventura concluded that Respondents' escrow account had a liability of $43,546.21 and a reconciled balance of $42,787.26. Ms. Ventura concluded that Respondents' escrow account had an excess of $11.05. Respondents never had a shortage in their escrow account. Respondents maintained an excess of $11.05 in their escrow account since September, 1993. In September, 1993, Respondents converted their method of bookkeeping to a computer system. The computer system failed to disclose an excess of $11.05 due to Respondents' misunderstanding of the appropriate method of labeling inputs to the software system. Respondents discovered and corrected the error prior to the formal hearing. Respondents properly made and signed written monthly reconciliation statements comparing their total escrow liability with the reconciled bank balances of their escrow account. Although Respondents did not use the form suggested in Rule 61J2- 14.012(2), Respondents satisfied the substance of the requirements for record keeping and reporting. Respondents maintained the information required in Rule 61J2-14.012(2) in bank statements, ledger cards, and checkbooks. At the time of the formal hearing, Respondents presented the information in a form that complied with the requirements of Rule 61J2-14.012(2). The shortage determined by Petitioner on April 28, 1994, was caused, in part, by errors made by Petitioner's investigator. It was the investigator's first audit, and the information provided by Respondents was not in an easily discernible form. However, Respondents never withheld any information, and Respondents maintained and provided all information required by applicable law.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Section 475.25(1)(b) and Rule 61J2-14.012(2). RECOMMENDED this 18th day of January, 1996, in Tallahassee, Florida. DANIEL MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January 1996.
The Issue The issue is whether Mr. Powell should be disciplined for irregularities in the handling of an escrow deposit by a real estate firm for which he was the qualifying broker.
Findings Of Fact The Respondent, Willie Powell, was at all relevant times a licensed real estate broker in the State of Florida, holding license number 0070494. Mr. Powell was the sole qualifying broker of Future Investments & Development II Co., Inc., trading as ERA Thompkins and Saunders Realty Company (hereafter, T & S), 2734 N.W. 183rd Street, Suite 206, Miami, Florida 33056. On or about November 12, 1990, Guillermo Castillo, a licensed real estate broker for Emerald Enterprises, Inc., received a listing agreement from Horace B. Miller to sell residential property (a duplex) owned by Miller located at 2331 N.W. 103rd Street, Miami, Florida. The property was listed with the Multiple Listing Service. On or about February 27 or 28, 1991, Mr. Castillo received a telephone call from Willie J. Thompkins of T & S saying he wanted to show the Miller property to a prospective buyer. On or about February 28, 1991, Mr. Castillo received through the mail slot at his office a written offer from George R. Howell of Dorchester, Massachusetts, to buy the Miller property, with a business card of Jerry Saunders of T & S. On or about March 6, 1991, Guillermo Castillo met with Horace Miller to review the Howell offer. At Miller's request, Castillo made some changes to the contract to reflect that Miller was selling the duplex in "as is" condition. Miller signed the contract and initialed the changes, and Mr. Castillo signed the contract on behalf of Emerald Enterprises, and called Willie J. Thompkins to tell him the contract had been signed. The next day, Mr. Castillo went to the office of T & S and dropped off the contract for the buyer to consider the seller's changes. A day or two later, a representative of T & S telephoned Guillermo Castillo and told Mr. Castillo that the buyer had accepted the seller's changes to the contract; Mr. Castillo then notified Miller. Mr. Castillo later received from T & S the signed contract with Mr. Miller's changes initialed by Mr. Howell. The contract was also signed by Mr. Thompkins of T & S. The contract called for a $1,000 deposit to be held in escrow by T & S (Exhibit 5, Paragraph IIa). Guillermo Castillo contacted T & S to check on the progress of the sale. He learned that J.P. Mortgage was handling the buyer's mortgage loan application. Castillo contacted J.P. Mortgage and was told that the loan was proceeding normally. After the contractual closing date of April 29, 1991, had passed without the closing taking place, Castillo contracted J.P. Mortgage again, but was told that they were no longer processing the loan. Castillo requested that J.P. Mortgage send him a letter to that effect, and he received a letter dated May 2, 1991, stating that J.P. Mortgage was withdrawing as the lender because the buyer failed to return the mortgage loan application. Castillo informed Horace Miller of the situation and Miller instructed Castillo to write to T & S making a claim to the buyer's deposit under the contract of sale. On May 4, 1991, Castillo sent a letter to T & S claiming the deposit for the seller. Paragraph Q of the contract provided for the seller to retain the buyer's deposit as liquidated damages if the buyer failed to perform the contract. On or about May 9, 1991, Guillermo Castillo received from Mr. Thompkins, the manger of T & S, a letter dated May 1, 1991, but postmarked May 6, 1991, ". . . requesting that the . . . file be cancelled" due to ". . . communication problems with . . . Mr. Howell," and citing unsuccessful attempts to contact Howell by telephone and by mail. When Castillo received that letter he contacted T & S to point out the seriousness of the matter and to press for forfeiture of the buyer's deposit. On May 9, 1991, Castillo received a telefax from Mr. Thompkins of T & S stating that the Howell deposit check had been returned for insufficient funds and attaching a copy of the returned check. Prior to his receipt of this telefax, Castillo had not taken any independent steps to verify whether T & S had actually received the Howell deposit. He had relied on the contract, which had been executed by a licensed salesman and believed he did not require further verification that the escrow deposit had been made. Neither Mr. Castillo nor Mr. Miller dealt with the Respondent, Mr. Powell, at any time concerning the sale of the Miller property. T & S received George Howell's $1,000 deposit in the form of a check on March 4, 1991, drawn on a Massachusetts bank and deposited it in its account with First Union National Bank which was used as the escrow account, account number 15462242336, on March 5, 1991. The check was charged back to the account twice, on March 11, 1991, and on March 26, 1991. Mr. Powell was a signatory on that escrow account. After Guillermo Castillo received the May 9, 1991, telefax, he notified Horace Miller. Mr. Miller had not taken any steps on his own to verify whether T & S had received the deposit because he had confidence in his broker to let him know right away if there were any problems with the sale. By May 9, 1991, Horace Miller had already incurred expenses preparing the property for closing, and had lost rent by terminating a tenancy in the property. Because the transaction never closed, Mr. Miller sustained financial damage, some of which he might have avoided if he had been notified earlier of the buyer's dishonored escrow deposit check. On or about May 28, 1991, Miller filed a complaint with the Department of Professional Regulation, which Sidney Miller investigated. He found that the person introduced to him during his investigation at T & S as Willie Powell was not actually the Respondent. In March 1991, Mr. Powell had not seen the bank statements for the T & S escrow account for several months, and had not signed the written monthly escrow account reconciliation statement for the month of October 1990 or for any subsequent month. Mr. Powell was serving as the qualifying broker of T & S for a salary of $75 per month and no commissions. He was not active in the management of the firm. He would come to the office of T & S approximately three days per week to check files and sign listing agreements, and he would call in to see if there were any problems, messages or documents to sign. He essentially loaned his brokers' license to those who operated T & S as an accommodation because he had known the Thompkins family for 25 years. Mr. Powell argues in his proposed order that "the adequacy of [Mr. Powell's] monthly reconciliations were impeded by frauds perpetrated upon him by persons at [T & S]" (PRO at page 9, paragraph 5). It is obvious that there were problems at T & S, since a person there misrepresented himself to the Department's investigator as Mr. Powell. The full extent of the misconduct there is unclear. There is no proof in this record that salespersons at T & S had fabricated escrow account statements for Mr. Powell. Had Mr. Powell proven that he performed monthly reconciliations with what turned out to be falsified records of T & S, his argument might be well taken. The record, unfortunately, shows that no reconciliations were done. Had Mr. Powell done them, the problem here should have been uncovered.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued finding Willie Powell guilty of violating Section 475.25(1)(b), Florida Statutes, finding him not guilty of violating Section 475.25(1)(d), Florida Statutes, and taking the following disciplinary action against him: Issuance of a reprimand. Imposition of an administrative fine in the amount of $1,000 to be paid within 30 days of the date of the final order adopting the recommended order. Placement of the license of Mr. Powell on probation for a period of one year beginning on the date of the final order and providing that during that period he shall provide satisfactory evidence to the Florida Department of Professional Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completion a 30-hour postlicensure education course in real estate brokerage management, in addition to any other education required of him to remain current and active as a real estate broker in the State of Florida, and that he be required to submit to the Commission during that year his monthly trust account reconciliations. Cf. Rule 21V-24.002(3)(i), Florida Administrative Code, on penalties for violation of Rule 21V-14.012(2), Florida Administrative Code. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of July 1992. WILLIAM R. DORSEY, JR. 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 day of July 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-0192 Rulings on Findings proposed by the Commission: Adopted in Findings 1 and 2. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 12. Adopted in Finding 13. Adopted in Finding 11. Adopted in Finding 15. Rulings on Findings proposed by Mr. Powell: Adopted in Finding 1 with the exception of the license number. Adopted in Finding 3. Adopted in Finding 2. Adopted in Finding 4. Rejected as unnecessary. Adopted in Finding 5. Adopted in Finding 4. Adopted in Finding 6. Generally adopted in Finding 6. Implicit in Finding 10. Adopted in Finding 6. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 10. Rejected as subordinate to Finding 10. Adopted in Finding 13. Rejected as unnecessary, the reconciliation was not one done shortly following the month of March reconciling the account for March 1991. It was done during the investigation conducted by Mr. Miller and took place between approximately June 20 and July 10, 1991. Adopted in Finding 15. Rejected as unnecessary. Adopted in Finding 14. Rejected as unnecessary, or subordinate to Finding 10. Rejected as unnecessary. Rejected as unnecessary. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Professional Regulation Suite N-607 401 Northwest 2nd Avenue Miami, Florida 33128 Harold M. Braxton, Esquire Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
The Issue Whether Respondent Kenneth M. Mossell's real estate license should be disciplined because he allegedly engaged in dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction; collected money in connection with a real estate brokerage transaction except in the name of his employer and with the express consent thereof; registered as an officer of a corporation while licensed as a salesman; operated as a broker while licensed as a salesman; and failed to account and deliver any secret or illegal profit in violation of Subsections 475.25(1)(b) and (e); 475.42(1)(b) and (d), Florida Statutes; Rule Sections 21V-14.012(2) and (3), and 21V-5.016, Florida Administrative Code; and whether Respondent L. Jean Jones DuBrian's real estate license should be disciplined based upon the charge that she is guilty of dishonest dealing by trick, scheme, or device, culpable negligence or breach of trust in business transactions; operated as a broker under a trade name without causing said name to be noted in the Commission records and placed on her license; or operated as a member of a partnership or as a corporation or as an officer or manager thereof, without said partnership or corporation holding a valid current registration; failed to prepare and sign required written monthly escrow reconciliation statements, all in violation of Subsections 475.25(1)(b) and (e); 475.42(1)(k), Florida Statutes, and Rule Sections 21V-14.012(2) and (3), Florida Administrative Code.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of Florida, specifically Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated thereunder. Respondent DuBrian is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0306696 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, c/o United Team, Inc. t/a ERA, 5844 Main Street, New Port Richey, Florida. Respondent Mossell is now, and was at all times material hereto, a licensed real estate salesperson in Florida, having been issued license number 0538751. The last license issued was as a non-active salesperson, 3432 Lori Lane, New Port Richey, Florida. Linda Sychowski, Frederick Reimer and Mary Patricia Mossell were officers of Majestic Realty and Leasing, Incorporated (Majestic), which was formed during May of 1989. Respondent Mossell was the primary financial investor. On or about April 16, 1990, Sychowski filed Majestic's annual report for 1990 with the Secretary of State listing Mary Patricia Mossell as Director/Treasurer, Sychowski as Director/President and Reimer as Director/Vice President. Respondent DuBrian was never an officer, director or shareholder of Majestic. During August 1989, pursuant to a verbal agreement, Respondent DuBrian became qualifying broker for Majestic. During August 1989, Sychowski notarized Respondent DuBrian's signature on a document titled "State of Florida, Department of Professional Regulation, Division of Real Estate, Application and Request for Licensure of a Real Estate Brokerage Corporation or Partnership." Respondent DuBrian's name appears on the portion of the form listing all corporate officers and directors. During October 1989, Respondent Mossell opened an escrow account at Citizens and Southern Bank (C & S) on behalf of Majestic. Respondent Mossell and Sychowski were signatories on the C & S account and Respondent Mossell signed as Secretary of the corporation. On September 20, 1990, Sychowski notified the Department of Professional Regulation that Respondent DuBrian had been terminated as broker of record for Majestic. President Linda Sychowski denies that she had any understanding that Respondent DuBrian would operate an independent real estate company outside of Majestic or that DuBrian would receive commissions for real estate activities except through Majestic. Sychowski is not a real estate licensee and relied upon Respondent DuBrian's competency as a broker. During April 1990, Sychowski signed check numbers 119 and 120 drawn on Majestic's escrow account. Those checks were payable to Respondent Mossell's wife, Mary Patricia Mossell, as reimbursement for the return of a security deposit and cleaning services. Sychowski learned, subsequent to Respondent DuBrian's termination, that DuBrian operated a real estate brokerage company out of her home independent of her activities as a broker with Majestic. She learned of DuBrian's other brokerage activities during a deposition in conjunction with a civil suit filed by DuBrian against Majestic. During October 1989, Jonathan Rummey entered into a lease agreement to rent property at 5416 Aloha Boulevard. Rummey paid monthly rent pursuant to the agreement and vacated the property during October 1990. Initially Rummey paid rent to Majestic and later DuBrian notified him that she had moved to another real estate company and that the rent was to be paid directly to her. Rummey understood that DuBrian was acting as an agent for the landlord and, as such, was receiving a commission from the landlord. Respondent Mossell was aware that Respondent DuBrian was conducting a real estate rental business from her home. Mossell knew this when DuBrian was hired as the qualifying broker for Majestic. Mossell permitted DuBrian to continue operating her independent rental brokerage business. Mossell allowed this since he thought that it would not be financially prudent for DuBrian to leave her ongoing business and hire on with a new firm, Majestic, which had no rental accounts. During April 1989, Scott Spoerl entered a lease agreement with Respondent DuBrian for rental property he owned. The agreement provided that rental payments would be made to Respondent "L. Jean DuBrian, Registered Real Estate Broker." Respondent DuBrian received ten percent of the rents collected as her fee for providing rental services to Spoerl. Spoerl received checks for his portion of the rent from Respondent DuBrian's account entitled "L. Jean Jones DuBrian Escrow Account." During May 1990, DPR Investigator Marjorie May conducted an inspection and escrow account audit of Majestic. At the time, Respondent DuBrian was Majestic's qualifying broker. During that audit, Investigator May discovered that Respondent DuBrian was not preparing and signing monthly reconciliation reports. During October 1988 Walter Hankinson, Jr., and his wife entered into an agreement to rent property for $500 per month from DuBrian. The Hankinson's paid monthly rent to Respondent DuBrian personally. The Hankinsons vacated the property during January 1992. The bank account entitled "Kenneth Mossell or Jean DuBrian, Special Account Number One," account number 1519555601 maintained at Barnett Bank had statements dated October 11, 1989, and November 9, 1989. No other statements were issued for that account. Two checks were drawn on the above-referenced account, one payable to and endorsed by Kathy Renquist and one dated October 23, 1989, payable to cash. The latter check was endorsed and cashed by Respondent Mossell. The referenced account was a personal and not a business account. Escrow accounts are usually identified as such. Banks label escrow accounts as such because the account is not directly charged. When bank accounts are set up, the account is designated as the customer instructs. The customer signs the signature card after the account title is typed in. During July 1989, Arthur Wagenseil entered a lease agreement to rent property from Respondent DuBrian. Respondent DuBrian represented the landlord and the monthly lease payments were paid directly to her. In July 1989, James Irwin entered a one year lease agreement with Wagenseil. As part of the agreement, Irwin paid Respondent DuBrian a ten percent (10%) commission of rents received. Typically, Respondent DuBrian received the rent from the tenant, deducted the necessary expenses and her commission, and remitted the balance to the landlord (Irwin). Respondent DuBrian advised Irwin that she had arranged with Majestic to keep her clients and business the way she was doing it at the time. During July 1989, Edmund Lekowski entered a two year lease agreement to rent property, paying $390 per month in rent to Respondent DuBrian as agent for the landlord. In May 1989, Frederick Reimer participated in the formation of Majestic as a director and principal. The other officers of the corporation were Sychowski and Mary Patricia Mossell. Majestic was established to engage in the business of renting and leasing realty. Reimer is not licensed as a real estate salesperson or broker. Reimer met Respondent DuBrian when she applied for and was hired as the broker for Majestic. Respondent Mossell was a part owner of Majestic and, as noted, was the primary financial investor. The corporate escrow account was maintained at C & S Bank and Respondent DuBrian was not a signatory on the account. Respondent DuBrian was employed at Majestic to meet the requirement of having a broker on staff. Reimer relied on Respondent DuBrian's knowledge of real estate law. Reimer was unaware of Respondent's DuBrian's operation of a separate rental/leasing business from her home. Respondent DuBrian was not an officer of Majestic nor did she inform Reimer of the legal requirement that she be an officer of the corporation and a signatory on the escrow account. Leo Huddleston, an investigator with Petitioner, met with Respondents DuBrian and Mossell on March 19, 1991, at which time Respondent DuBrian acknowledged that she was not a signatory on the Majestic escrow account because she was not a stockholder or shareholder. During the March 19, 1991 interview, Respondent DuBrian advised Huddleston that she was conducting a rental business, as a broker, separate and distinct from Majestic. During the March 19, 1991, meeting, Respondent DuBrian advised Investigator Huddleston that she was unaware that radon and agency disclosures and written monthly reconciliations were required. Also, during that meeting with Investigator Huddleston, Respondent Mossell advised that he was a signatory on the Majestic escrow account and that he withdrew $310 from that escrow account when a Mr. Schlatterman vacated some rental property that was leased from Majestic. Respondent Mossell's withdrawal was based on repayment and reimbursement to his wife for cleaning the Schlatterman's vacated apartment and a $250.00 cash refund of a security deposit that Mary Mossell had given to the tenant, Schlatterman. Respondent Mossell did not provide Investigator Huddleston with documentation for the claim on the Schlatterman's security deposit. In this regard, the Schlatterman's experienced an emergency and had to vacate on a weekend when the banks were closed. At the time of Investigator Huddleston's interview of Respondents during March 1991, Respondent DuBrian acknowledged that while she was employed as qualifying broker for Majestic, she was also operating an independent rental business. Investigator Huddleston's investigation of the Petitioner's records revealed that Respondent DuBrian was only registered as qualifying broker for Majestic and for no other company.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding that: Respondent L. Jean Jones DuBrian's real estate license be suspended for a period of six (6) months and that she be issued a written reprimand and ordered to complete 24 hours of post licensure education within the period of suspension or as soon thereafter as is practicable. Respondent Kenneth M. Mossell be reprimanded and ordered to complete 18 hours of post licensure education within one year of the issuance of the Final Order. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of October, 1992. JAMES E. BRADWELL 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 5th day of October, 1992. APPENDIX TO RECOMMENDED ORDER CASE NOS. 92-1072 AND 92-1322 Rulings on Petitioner's Proposed Recommended Order: Paragraph 17, rejected as unnecessary. Paragraph 19, rejected as unnecessary and irrelevant. Paragraph 37, rejected as unnecessary. Paragraph 57, adopted as modified, Paragraph 40, Recommended Order. COPIES FURNISHED: Janine B. Myrick, Esquire Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 L. Jean Jones DuBrian 7326 Baltusrol Drive New Port Richey, Florida 34654 Kenneth Milton Mossell 3432 Lori Lane New Port Richey, Florida 34655 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
Findings Of Fact The Department is the state agency charged with the licensing and regulation of real estate brokers. Respondent's real estate broker license number 0325307 was active in Florida between October 1985 and November 1987. During this period, the business address registered at the Department for AmBest Realty was: 333-31st Street North #24, St. Petersburg, Florida 33713. Respondent was the qualifying broker for this real estate firm. The real estate office at the above-mentioned address was officially closed by Respondent in November 1987. At this particular time, there had been a decrease in real estate sales throughout the state. Respondent changed careers and became a long haul trucker in order to provide for his family under the then prevailing real estate market conditions. Post Office Box 12811, St. Petersburg, Florida 33733, was acquired by Respondent in November 1987 so that he could continue to receive communications regarding his former real estate practice, if necessary. His current profession as a long haul trucker frequently required his absence from the state for days at a time. The use of the post office box allowed him to review all correspondence regarding AmBest Realty whenever he returned to St. Petersburg, Florida from his trucking route. Respondent did not surrender or account for his license to the Real Estate Commission when he closed or moved his real estate business to his home in November 1987. By statute, Respondent was required to do so within 10 days of the address change or office closure. Notification to the Board should have been done by Respondent on a form provided by the Real Estate Commission for that purpose. Respondent's license ceased to be in force when he closed the real estate office at 333-31st Street North #24, St. Petersburg, Florida. In March 1988, Respondent attempted to allow his broker license to automatically revert to inactive status, pursuant to Section 475.182(3), Florida Statutes [1987]. Although this decision ignored the previous deactivation of the license, it corroborates Respondent's testimony that the office closed in November 1987. When Respondent attempted to place the license in an inactive status in March 1988, it was his intention to reactivate his license within a four-year period if the real estate market recovered from its slump. Respondent notified the Department of his new mailing address at the post office box prior to his attempted placement of the license in an inactive status. Respondent's failure to notify the Board of the change in his business address caused the Board to improperly rely on that business address as the proper location for office inspections and the Department's review of escrow/trust accounts. In August of 1990, an investigator with the Department unsuccessfully attempted to contact the Respondent at the registered business address at 333- 31st Street North #24, St. Petersburg, Florida. The real estate office and a real estate sign were no longer at the location. Respondent was later contacted by the investigator through the home address previously listed on his license that had been replaced in March 1988 by the post office box number. The investigator requested Respondent make his escrow trust account records and supporting documentation available for inspection. Respondent advised that he was unable to comply with the request as his original escrow trust account records had been stolen in a garage burglary in late November 1987. No effort was made by Respondent to reconstruct or to aid in the reconstruction of the missing records. No additional mitigating factors were presented at hearing other than the break-in to the location where Respondent stored his original escrow trust account records.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Respondent, James E. Willis t/a AmBest Realty be found not guilty of Count I of the Administrative Complaint. That Respondent be found guilty of violation of Section 475.25(1)(e), Florida Statutes, as set forth in Count II, based upon his failure to preserve and make available to the Department all escrow trust account records with supporting documentation, as required by Rule 21V-14.012(1), Florida Administrative Code. That the privilege of Respondent Willis to reinstate his real estate broker's license be suspended for three years, subject to a reduction in the suspension term if the escrow trust account records are reconstructed and presented to the Board. DONE and ENTERED this 14th day of January, 1992, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1992. COPIES FURNISHED: JAMES H GILLIS ESQUIRE DPR - DIVISION OF REAL ESTATE 400 W ROBINSON ST ORLANDO FL 32801 1772 JAMES E WILLIS, AMBEST REALTY PO BOX 12811 ST PETERSBURG FL 33733 2811 DARLENE F KELLER/EXECUTIVE DIRECTOR DPR - DIVISION OF REAL ESTATE 400 W ROBINSON ST ORLANDO FL 32801 1772 JACK McRAY ESQ/GENERAL COUNSEL DEPT OF PROFESSIONAL REGULATION 1940 N MONROE ST TALLAHASSEE FL 32399 0792
Findings Of Fact At all times material to these proceedings, Respondent, Sandra K. Linton, was a licensed real estate broker in Florida, holding license number 0419502. Ms. Linton was the owner and qualifying broker for Respondent Key Realty Co. of Pensacola, Inc. (Key Realty). Key Realty was a licensed real estate brokerage company in Florida, holding license number 0244319. Both Respondents, and in particular Ms. Linton, have excellent character references from other active members of the real estate community. On November 7, 1989, Petitioner entered a Final Order against Respondents for escrow account violations of Chapter 475, Florida Statutes. Among other things, the Final Order required Respondents to submit monthly escrow account status reports. From November 7, 1989, through March 27, 1990, the Respondents did not file any escrow account status reports as required by the Final Order. Ms. Linton had turned the responsibility of filing those reports over to her accountant. However, Ms. Linton did not check to see if the escrow reports were filed by her accountant. Her accountant's full-time employment was as a contract auditor for the U.S. Navy. In October, 1989, the accountant was assigned to audit a contract in the Pacific and moved to the Pacific island which was the site of the contract. The accountant advised Ms. Linton that he would be leaving in October. After' October, 1989, the accountant no longer did any accounting work for Respondent. However, Ms. Linton did not make arrangements for the filing of the escrow account reports required by the Final Order after her accountant left the country. No sufficient excuse was offered by Ms. Linton for her failure to file or ensure the filing of these escrow reports. The Respondents' rental escrow account revealed a shortage of $2,008.14 as of March 21, 1990. The money to cover the shortage was placed in a desk drawer in the Respondent's office for deposit while the Respondent was on vacation. Her employees failed to make the deposit. Given these facts, the resultant shortage was a very minor transgression of Chapter 475, Florida Statutes, and Rule 21-V, Florida Administrative Code. Additionally, Bank charges totaling $328 were debited from the rental escrow account from June 1989 to February 1990. The Respondent's bank, Barnett Bank of Pensacola, had erroneously charged the rental escrow account for these bank charges despite instructions from the Respondent not to do so. All of the debited bank charges were either replaced by the bank or Ms. Linton. Since it was the bank's actions which caused these charges to be made to Respondents' rental escrow account and not Respondents' actions, no violation of Chapter 475, Florida Statutes, can be attributed to either Respondent. Several checks totaling $3,605.15 were written by Respondent, Sandra K. Linton, from the rental escrow account and later returned due to nonsufficient funds. The checks were returned for nonsufficient funds due to the bank's hold policy. Since Respondent had consummated numerous transactions with Barnett Bank of Pensacola in which the hold policy was not applied to her account, Respondent had no knowledge that the bank's hold policy would be applied to her account. No reliable evidence was presented that this set of facts constituted bad accounting methods on the part of Respondents or otherwise violated the provisions of Chapter 475, Florida Statutes. In the course of operating a rental management business, Respondents, on October 25, 1989, entered into a rental property management agreement with Richard and Susan Vigeant. The agreement called for monthly rental statements and disbursements. Respondents collected rental funds on behalf of the Vigeants from November, 1989, to February, 1990. However, Respondents did not provide monthly statements or deliver net rental funds to the Vigeants until March 6, 1990. Respondents were under the impression that the Vigeant's funds were to be held by the Respondents for minor repairs to the Lessor's property. The Vigeants were not under such an impression and, after numerous phone calls for more than a month, the Vigeants' requested disbursement of the net rental funds on February 20, 1990. The funds were disbursed to the Vigeants on March 6, 1990. Respondents failure to give the Vigeants monthly accounting reports as required by the rental management agreement violates Section 475.25 (1)(d), Florida Statutes. However, this violation, while not minor, is also not overly serious and should not receive severe discipline. None of the evidence demonstrates that Ms. Linton or her business were guilty of any fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence or breach of trust in a business transaction. The evidence did show that Ms. Linton is not very good at maintaining the rental escrow account or at seeing that the rental escrow account was properly maintained. Respondents' recordkeeping is poor and in disarray. The evidence was clear that Ms. Linton does not have the inclination, desire, or capability to maintain her broker's escrow account. The strongest evidence to support this conclusion is that all of Respondent's latest difficulties with her escrow account occurred after she had already been disciplined for escrow account violations which occurred prior to the events under consideration here. 1/ Given this inability, Respondent cannot be entrusted to properly handle escrow funds given to her. Since Respondents are not competent to handle escrow matters Respondents' licenses should be revoked. The Respondent does not currently have the financial ability to pay any fines and such a penalty would not be appropriate in this case.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: The Division enter a Final Order finding Respondents guilty of four violations of Chapter 475, Florida Statutes, and revoking Respondents' real estate broker's licenses. DONE and ENTERED this 24th day of September, 1990, at Tallahassee, Florida. DIANE CLEAVINGER, 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 24th day of September, 1990.
The Issue The issue for consideration in this case is whether the Respondents' licenses as real estate broker and brokerage corporation, respectively, should be disciplined because of the matters set out in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Florida Real Estate Commission was the state agency responsible for the licensing and regulation of real estate salespersons, brokers, and brokerage operations in Florida. The Respondents, Arthur B. Karns and Karns Real Estate Inc., were a licensed real estate broker and brokerage corporation, respectively. Sharon Thayer has been an investigator with the Florida Department of Professional Regulation's Division of Real Estate for over 3 1/2 years. As a part of her duties, she is required to conduct random, no-notice inspections of real estate brokerage offices in Florida. As a part of these inspections, she conducts audits of the broker's escrow account and over time has conducted approximately 1,000 audits. In her audits, she follows a standard audit procedure to reconcile the trust liability of the broker with the escrow account bank balance. In early September, 1991, Ms. Thayer conducted an escrow audit and office inspection of the Respondent's company. During her initial visits, on September 3 and 5, 1991, she requested he furnish her with the office records pertinent to his trust escrow account. Respondent promptly provided most of the records excepting only the account reconciliation forms required by the Commission. When Respondent provided Ms. Thayer with the records, including what he felt were the reconciliations, she reviewed them and then discussed them with him, indicating wherein they were deficient and what, in addition, she would need. In her initial report, completed on the conclusion of the initial visit, she indicated there was an overage of $3,452.75 in the Respondent's escrow account. This figure was in error. She also noted that Respondent was not accounting for his trust liability and indicated he had 5 days in which to take corrective action and provide documentation of the action taken. When she returned for a follow-up visit on September 20, 1991, Ms. Thayer noted that the original note of overage had been in error and that the account now balanced. To achieve balance, however, she referred to the original $500.00 in seed money Respondent had used to open the escrow account. This covered errors in the account as of December, 1990 and service charges. Without this, she noted, the account would have been short by $446.45. Ms. Thayer determined that the Respondent had opened his escrow account with $500.00 of his own funds as seed money. She contend this was improper as the Department allows only $200.00 of seed money which is to be reported each month on the account reconciliation. The $200.00 "limit" is relatively recent. At the time in issue, she claims, the "limit" was set, by unwritten, unpublished Department policy, at $100.00. The only evidence of the existence of such a policy is an article in the Fall, 1991 FREC newsletter, written by Howard M. Gunter, Jr., then Chairman, which notes: There is an unwritten rule that currently allows a broker to keep a minimum amount in his escrow account to cover bank charges, .... The April, 1992 edition of the Central Palm Beach County Association of Realtors' Realtor Review advises of new FREC rules, one of which allows a broker to maintain up to $200.00 of his own or the company's funds in the escrow account to keep it open or to pay for bank monthly service charges. Ms. Thayer's investigation also appeared to indicate that in January, 1991, Respondent disbursed an $850.00 security deposit to lessors of a rented unit when the actual deposit collected was only $500.00. This was also determined to be in error. The evidence demonstrates that on January 3, 1991, Respondent drew check number 1040 on his escrow account to open an escrow account for the Alexandre to Livingston rental. The deposit of $1,700.00 in that case included an $850.00 security deposit. This money was not disbursed to the client, however, as it was placed in an escrow account for that lease. In any case, the security deposit should have been only $500.00 as that was all that had been collected by the prior agent and transferred to the Respondent. When the deposit was made here, Respondent, whose practice was to collect the first and last month rent in advance, along with a security deposit of one month rent, mistakenly assumed the prior agent had done the same. When he learned of his mistake, by letter dated September 13, 1991, he notified the Alexandre's of the mistake and noted the excess $350.00 would be paid back to Karns Real Estate, Inc. Therefore, the extra $350.00 in the trust account had been placed there by Respondent from his own funds, not from any client funds and was due back. Since the $96.45 in bank charges were also accounted for previously and deducted, there was in actuality no shortage. Ms. Thayer also discovered that with regard to two contracts for the sale of real property, both dated in early May, 1991, between E. Buwalda as seller and Ronald Cecere as buyer on one, and Cecelia Barraclough as seller and Jeanne Cecere as buyer on the other, $100.00 in cash was accepted as a partial down payment on each, with each contract calling for an additional deposit of $2,900.00. A special clause in each contract provided: The purchaser will post a Certificate(s) of Deposit with a face amount of at least $3,000.00 with Karns Real Estate, Inc. to be held in escrow as and for the $2,900.00 additional deposit. The Certificate(s) of Deposit can be returned to the Purchaser if and when the Purchaser posts $2,900.00 in cleared funds to cover the additional deposit. In fulfillment of that clause requirement, the Ceceres deposited with the Respondent CD Numbers 020002358756 and 020002359408, from Nova Savings Bank, each in the amount of $2,000.00, the former dated October 24, 1990 and the latter dated December 3, 1990, both showing Jeanne A. Cecere as trustee for Patrick J. and Ronald P. Cecere. The certificates also reflected they were "Not Transferable except on the books of Nova Savings Bank." By his own admission, at no time did Respondent notify either of the sellers that the certificates he held on their behalf as additional deposit were not transferable outside the Nova Savings Bank. At the same time he received the certificates as deposit on the Barraclough property, Respondent also received an additional $1,000.00 in cash to constitute the balance of the $3,000.00 deposit called for in the contract. Aside from a letter from the Ceceres' chastising the Department for its action against Respondent and expressing outrage that the agency should have a negative opinion as to the propriety and legality of the Respondent's activities, there is no independent evidence of any additional deposit placed with regard to the Buwalda contract. In any event, when the matter was noted by Ms. Thayer, the Ceceres, by checks dated September 5, 1991 in the amounts of $1,900.00 each, made payable to Karns Realty, Inc., replaced the two certificates. When Ms. Thayer discussed this matter with Mr. Karns, he seemed surprised at her concern. He indicated he felt accepting the certificates was the same as taking jewelry as security. However, he promised to get replacement security and, as was seen, did so immediately. Ms. Thayer was also concerned about the Respondent's apparent inability to properly reconcile his escrow account with the related bank balance. Her audit revealed he was using a lengthy, self-developed form to balance the checking account statement but this is not enough. There is no requirement that any particular form be used, but the Commission had developed a sample form which contains all the information required in a proper reconciliation and Department rules set out those requirements. On May 13, 1991, the Department of Professional Regulation, in a letter to all real estate brokers, indicated the concern of the Commission that brokers be aware of and comply with their responsibilities regarding monthly escrow account reconciliation. The letter cited the provisions of Commission Rule 21V-14.012 which, while noting there is no official form to be used, reminds brokers the reconciliation must contain certain required information. The sample form, referenced above, requires a bank reconciliation and, in addition, a trust liability reconciliation. Ms. Thayer concluded Respondent had, indeed, completed a full bank reconciliation, but had not completed the additionally required trust liability reconciliation and merged the two. Notwithstanding Respondent's continuing protestations that he had done a complete reconciliation, the evidence indicates rather that he has not. As Respondent's own exhibit, an extract from the 1991 Gaines & Coleman continuing education book points out at paragraph 23 on page 7, the provisions of the rule on escrow reconciliation "is much more than a mere balancing of checkbook accounts." The evidence demonstrates Respondent did no more than that and his reconciliations were not adequate. Mr. Geil, who assisted Ms. Thayer in the audit, has reviewed between 100 and 150 offices in addition to Respondent's office. Of all of these, he would rate Respondent among the 5 or 6 brokers who did the most detailed reconciliations, but he cannot say, from what he saw of Respondent's records, whether Respondent was making a bona fide effort to do an accurate reconciliation. It is clear, however, that, as Respondent repeatedly asserted at hearing, everyone makes mistakes, and Respondent's delicts, established by the evidence, do not show any fraudulent or criminal intent. As Ms. Thayer noted, she found no evidence of fraud, theft or an abuse of trust money for Respondent's own purposes, and the Commission has received no complaints about him from any of his clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that a Final Order be entered in this case by the Florida Real Estate Commission dismissing Counts I through VI of the Administrative Complaint, but placing the licenses of Respondents, Arthur B. Karns and Karns Real Estate, Inc. on probation for a period of one year under such terms and conditions, specifically including post licensure education, as the Commission may require, and imposing a reprimand on the Respondent, Arthur B. Karns. RECOMMENDED this 21 day of August, 1992, 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 23 day of August, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1266 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: - 4. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated except for the word shortage which should be prefaced by the work "apparent." Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. First three sentences accepted. Balance is a comment on the evidence. FOR THE RESPONDENT: & 2. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and resolved in favor of Respondent. Accepted and resolved in favor of Respondent. 6A -C. Accepted and discussed within the body of the Order. 6D. Not a Finding of Fact but a discussion of the evidence. 6E & F. Not relevant. 7A - C. Not a Finding of fact but a statement of evidence presented. COPIES FURNISHED: James H. Gillis, Esquire DPR - Division of Real Estate Hurston Building, N-308 400 West Robinson Street Orlando, Florida 32801-1772 Arthur B. Karns,. pro se Karns Real Estate, Inc. 6346-63 West Lantana Road Lake Worth, Florida 3343 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 Post Office Box 1900 Orlando, Florida 32802-1900
The Issue The issue in this case is whether the Respondents' real estate licenses should be disciplined based upon charges set forth in the Administrative Complaint which allege violations of Sections 475.25(1)(b),(e), and (k), Florida Statutes.
Findings Of Fact The Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints which allege, in particular, violations of Chapters 455 and 475, Florida Statutes, and rules promulgated thereunder. Respondent David Shihada is now and, at all times material hereto, has been licensed as a real estate broker in the State of Florida, having been issued license number 0239798. His most recent broker's license was issued to him at Shihada Real Estate, Inc., 959 S.W. 87th Avenue, Miami, Florida 33174. Respondent Shihada Real Estate, Inc., is now and, at all times material hereto, has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0239797. The last license issued was at the address of 959 S.W. 87th Avenue, Miami, Florida 33174. At all times material hereto, Respondent David Shihada was licensed and operating as the qualifying broker for Respondent Shihada Real Estate, Inc. From May 3, 1990 to May 10, 1990, Petitioner's investigator, Hector F. Sehwerert, conducted an audit of Respondents' escrow accounts. This audit revealed that Respondents' pending sales escrow account #0103005236-06 had a total current liability of $22,050, with a current bank balance of $20,596.56, thereby reflecting a shortage of $1,453.44. In a sworn affidavit dated May 10, 1990, Respondent David Shihada stated that the shortage was a bank "mistake". On or about May 10, 1990, the Respondents deposited sufficient funds, by check numbered 1931, to cover the $1,453.44 shortage in their escrow account. On or about May 8, 1990, Gabriel Sanchez, Respondents' salesman who is also an officer at Westchester Bank where Respondents maintain their escrow account, signed a sworn affidavit stating that he had just completed an attempted reconciliation of the aforementioned escrow account from May 1989 to May 2, 1990. Sanchez was unable to find any shortage in Respondents' escrow account. He will be doing monthly reconciliations for the Respondents from May 1990 forward. From May 31, 1989 to May 2, 1990, the Respondents failed to complete and sign written monthly reconciliation statements comparing their total trust liability with the reconciled bank balance of all trust accounts as required by the rules of the Florida Real Estate Commission.
Recommendation Based upon the foregoing, it is recommended that a Final Order be issued concluding that Respondents' actions as found above constitute a violation of Section 475.25(1)(b), Florida Statutes, and further: Imposing an administrative fine in the total amount of $500; Placing the Respondents' real estate licenses on probation for a period of one year, provided that the Respondents shall not be required to retake any state licensure examination as a result of this proceeding, and provided further that Respondent David Shihada shall provide quarterly escrow account activity reports, including evidence of compliance with Rule 21V-14.012, Florida Administrative Code, as well as evidence of successful completion of the sixty hour post-licensure examination course for brokers in addition to other continuing education required to be completed by licensees in order to maintain their active and current licensure status; Requiring the Respondent David Shihada to appear before the Florida Real Estate Commission at the last meeting of the Commission preceding termination of his period of probation; and Dismissing Counts III through VI of the Administrative Complaint. DONE AND ENTERED this 21st day of November 1990 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 21st day of November 1990. APPENDIX (DOAH CASE NO. 90-4939) Rulings on Petitioner's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Finding 7. Adopted in Finding 8. 9-10. Adopted in Finding 9. 11. Adopted in Finding 10. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate P. O. Box 1900 Orlando, FL 32802-1900 John H. Duhig, Esquire 702 City National Bank 25 West Flagler Street Miami, FL 33130-1770 Kenneth E. Easley, Esquire 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller, Director Division of Real Estate P. O. Box 1900 Orlando, FL 32801
