Findings Of Fact Pursuant to the Prehearing Stipulation, the following facts are established: This case is based on allegations by John Carosso that James J. Baruch, a licensed real estate broker, wrongfully allowed the dispersal of a deposit Mr. Carosso had made to Centennial Development Corporation on a villa to be constructed. James J. Baruch was associated with Wyn Pope Associates, Inc., as a realtor and salesman over a period of several years and on several projects which Mr. Pope developed. On the Gasa Tiempo project, the developer was Centennial Development Corporation and sales were handled by Wyn Pope Associates, Inc. This corporate realtor was formed using James J. Baruch's realtor's license. During their association, Wyn Pope and James Baruch had always agreed that no deposits would be accepted which could not be used for construction after the mortgage commitment. In the past Mr. Baruch had rejected contracts which did not allow such use of the deposit. The Casa Tiempo contracts all contained such a provision and deposit monies were invariably used for construction with the knowledge of the purchasers. Only the contract with John Carosso was changed to provide for an escrow and to prohibit use of the deposit for construction. Mr. Baruch did not prepare or negotiate this contract and his only connection with the Carosso sale was to witness Mr. Carosso's signature. The contract was negotiated and altered by Wyn Pope without Mr. Baruch's knowledge or consent. Neither Mr. Baruch nor Wyn Pope Associates was a party to the contract and the contract said that the deposit would be held in escrow, but did not specify an escrow agent. As a party to the contract, Centennial acknowledged receipt of the deposit and thereby agreed to hold it in escrow. Since Mr. Baruch was not an officer or in any way a part of Centennial Development Corporation, he had no authority to approve or modify the contracts and no reason to believe that he needed to review each contract himself. Mr. Baruch was therefore not authorized to control the deposit which according to the terms of the contract was made to Centennial Development Corporation. Although the contract was signed July 6, 1979, no deposit was received until July 17, 1979. The changes regarding escrow, although typed in, were each initialed, indicating that the contract was changed after execution and witnessing. Given the ten-day delay and initialing, it is likely that the changes regarding the deposit were made in the contract after Mr. Baruch had witnessed Mr. Carosso's signature and as a condition of the deposit being actually paid. In that case, Mr. Baruch would have no way of knowing that the standard contract had been modified unless he checked each contract submitted by other salesmen. Contrary to paragraph 9 of Petitioner's Complaint, Mr. Baruch never had actual knowledge of the terms of the Carosso contract until the project was taken over by Casa Tiempo Builders, Inc., in May, 1980. Mr. Baruch received no commission on the Carosso sale and never received any part of the deposit. Mr. Baruch completely severed his connection with Wyn Pope Associates, Inc., and Casa Tiempo in March, 1980, and did not profit in any way from the additional deposits demanded and received by Joseph Falso in May, 1980. On or about August 7, 1980, John Carosso entered into an agreement for the completion of his villa in which he released Centennial Development from all claims connected with his deposit. John Carosso was injured by the use of his deposit only in that he lost the option of withdrawing his deposit and rescinding the contract. He could not have finished his home at the original contract price even if the deposit remained in escrow. All the homes in the project had appreciated greatly in value between the contract of July 6, 1979 and the May, 1980 meeting, thus it was to each owner's advantage to pay the 7,500 and complete construction. Because of this appreciation, Mr. Carosso could have paid the $7,500 and immediately sold the house in May, 1980 for enough to return his entire initial deposit plus a profit. One Mr. Hmeilewski, a contract vendee, did so with the help of the new management of Centennial. Selling his contract would thus have enabled Mr. Carosso to be in a better position than rescission and return of the deposit. He preferred to have the house at the increased price. Respondent's position is that he was not responsible for the deposit and should not be sanctioned for the events stipulated to, especially since no actual damage was incurred by Mr. Carosso and all claims against the Developer and escrow holder Centennial Development Corporation were released by Mr. Carosso.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Administrative Complaint filed against James J. Baruch be dismissed. DONE and ORDERED this 24th day of August, 1982, in Tallahassee, Florida. SHARYN L. SMITH, 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 24th day of August, 1982. COPIES FURNISHED: Frederick H. Wilsen, Esquire Department of Professional Regulation State Office Building 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Staff Attorney Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Nicholas Rockwell, Esquire McCUNE HIAASEN CRUM FERRIS & GARDNER, P.A. 25 South Andrews Avenue Post Office Box 14636 Fort Lauderdale, Florida 33302 Samuel R. Shorstein, Secretary Department of Professional Regulation Old Courthouse Square Bldg. 130 North Monroe Street Tallahassee, Florida 32301 Carlos B. Stafford Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802
The Issue The issue in this case is whether the allegations of the Administrative Complaints are correct and, if so, what penalty should be imposed.
Findings Of Fact R. Granger Bruner is and at all material times has been licensed as a real estate broker, Florida license number 0010871. CASE NO. 90-2462 On or about September 9, 1989, Mr. Bruner obtained a contract from Alabama resident Earl W. Reed in which Mr. Reed offered to purchase certain property from owner Gary Salter. 1/ Mr. Reed, by his check, deposited with Mr. Bruner the sum of $1,000, as an earnest money deposit in connection with Mr. Reed's offer to purchase Mr. Salter's property. Mr. Bruner erroneously deposited Mr. Reed's earnest money deposit check into the Granger Bruner Realty operating account at People's National Bank of Niceville. Mr. Bruner's escrow account, where the earnest money deposit should have been held, was at the local Barnett Bank in the name of Granger Bruner Realty Trust Account. On or about September 14, 1989, the listing agent for Mr. Salter contacted Mr. Bruner's office and informed Mr. Bruner that Mr. Salter had withdrawn the property from the market. By letter dated September 21, 1989, Mr. Bruner notified Mr. Reed that the property had been withdrawn from the market and that the earnest money deposit was being returned. Enclosed with the letter was People's National Bank of Niceville check #509 drawn on the operating account of Granger Bruner Realty in the amount of $1,000 payable to Earl Reed. The letter and check were mailed to Mr. Reed at his address in Alabama. Mr. Reed apparently did not receive the letter or check, and became concerned about the return of his deposit money. The administrative complaint alleges that Mr. Reed continued to demand return of the deposit. Although the Department introduced a copy of Mr. Reed's complaint, Mr. Reed did not testify. The evidence does not establish that Mr. Reed made repeated demands on Mr. Bruner for return of the deposit. The complaint further alleges, but the evidence does not establish, that the September 21, 1989 check was not mailed until September 28, 1989. On September 30, 1989, Mr. Reed met in Crestview with Mr. Bruner and demanded the return of his earnest money deposit. Mr. Bruner issued check #2924 in the amount of $1,000 from Mr. Bruner's wife's personal account payable to Earl Reed. Mr. Bruner subsequently had a stop-payment order issued against the first check to Mr. Reed. CASE NO. 90-2463 Prior to October 6, 1989, Elaine Brantley, an auditor/investigator for the Department contacted Mr. Bruner and made an appointment to perform a routine audit on Mr. Bruner's accounts. Prior to October 6, 1989, Mr. Bruner was aware that his escrow account was short. On that date, Mr. Bruner deposited approximately $1,400 into his escrow account to cover the shortage. The deposit resulted in an overage in the account. Upon Ms. Brantley's arrival, Mr. Bruner informed her that the escrow account was short, that he'd gotten behind in bookkeeping, and that his secretary was depositing additional funds into the escrow account. Ms. Brantley had Mr. Bruner telephone the bookkeeping department at Barnett Bank. With Mr. Bruner's approval, Ms. Brantley asked for and obtained the balance of the escrow account by telephone from a bank employee. 2/ Mr. Bruner then informed Ms. Brantley that escrow account liabilities totaled $1,727.38. Ms. Brantley reviewed the account's check ledger and determined that the escrow account was indeed short. During the audit, Ms. Brantley noted an escrow account check #453 dated 7/25/89 in the amount of $500 made payable to Mr. Bruner. Ms. Brantley stated that Mr. Bruner said that he had disbursed the funds to himself to cover a mortgage payment he made to a third party identified as Ms. Penner. At hearing, Mr. Bruner testified that he had used his escrow account to cash a $400 check for another person, and that check #453 was drafted to recover his personal funds from the account. He stated that the check was written in error and that the transaction was not handled correctly. He admitted that he did not know the balance of the escrow account at the time the check was written. The recorded checkbook balance at the time was $340.19. At the time of the audit, Ms. Brantley also noted check #487 dated 9/26/89 in the amount of $500 to Ms. Penner. The evidence establishes that check #487 was Mr. Bruner's personal mortgage payment to Ms. Penner.
Recommendation Based upon the foregoing Findings of fact and Conclusions of Law, it is RECOMMENDED: That the Department of Professional Regulation, Division of Real Estate, enter a Final Order suspending the licensure of R. Granger Bruner for a period of 90 days, and imposing a total fine of $2,000, including $1,000 pursuant to Rule 2IV-24.001(3)(1), Florida Administrative Code, and $1,000 pursuant to Rule 21V-24.001(3)(c) and (f), Florida Administrative Code. It is further recommended that R. Granger Bruner be required to successfully complete a course of education related to management of operating and escrow trust accounts and be required to file escrow account status reports with the Commission at such intervals as the Commission deems appropriate. DONE and ENTERED this 17th day of April, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1991. APPENDIX TO RECOMMENDED ORDER CASE NO. 90-2462 The Petitioner did not file a proposed recommended order. The Respondent filed a "Proposed Order" which sets forth proposed findings of fact. The proposed findings are accepted as modified in the Recommended Order except as follows: "Proposed Order" Accepted as to failure to prove exact amount of escrow account shortage. Rejected as to whether a shortage existed, contrary to evidence. Rejected. The testimony at hearing that certain deposits were not received is contrary to information provided to auditor and was not credited. Although the testimony related to the escrow account balance was unsupported hearsay, the auditor's testimony related to deposits and liabilities was based upon admissions by the Respondent. See Section 90.803(18), Florida Statutes. Rejected, conclusion of law. Rejected, not supported by weight of evidence. 8-9. Rejected, unnecessary. 10. Rejected, immaterial. 11-12. Rejected, unnecessary. "Finding of Fact" The Respondent also filed a separate statement entitled "Finding of Fact" which includes additional proposed findings of fact. The proposed findings are accepted as modified in the Recommended Order. COPIES FURNISHED: James H. Gillis, Esquire Senior Attorney Department of Professional Regulation Division of Real Estate Hurston North Tower 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900 Bart O. Moore, Esquire Moore, Kessler & Moore 102 Bayshore Drive Niceville, Florida 32578 Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation Division of Real Estate Hurston North Tower 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Chapter 475, Florida Statute, and rules promulgated pursuant thereto. Respondent Dean O. Vanderwoude is now a real estate broker and was at all times material hereto a real estate salesman in Florida having been issued license number 0432878 in accordance with Chapter 475, Florida Statutes. On August 15, 1988, Respondent passed an examination to be licensed as a broker and was licensed as a broker on September 1, 1988. At all times material hereto, Respondent was licensed as a salesman and operated under the direction, control, or management of a licensed real estate broker, Anne M. Graffunder, and P.M.M. Properties under a 100 percent commission agreement whereby Respondent rented office space from his broker Graffunder. Respondent was affiliated with Graffunder and P.M.M. Capital, Inc., from approximately November 4, 1986, to October 16, 1987. When Respondent became affiliated with P.M.M., he had been licensed less than one year having first been affiliated with Security Realty Florida from December 20, 1985, to November 4, 1986. Under Graffunder's supervision, Respondent received little assistance in the form of guidance or instructions as to the methods and manner of presenting purchase contracts to sellers, little or no office support in the form of clerical assistance or technical training in the methods of handling escrow funds, no malpractice insurance coverage in the form of errors or omission's policy and no sales/training seminars. On approximately April 6, 1987, Respondent obtained a sales listing from Gary Alan Dahl (Dahl), a real estate investor, concerning real property, the record owner of which was Joe Belcik who had granted to Dahl equitable title to the property by Quit Claim Deed yet unrecorded. (Petitioner's Exhibit 2). The real property located at 2785 Adrian Avenue, Largo, Florida, had been purchased by Belcik from Dahl who had previously purchased the property from the Veteran's Administration. Respondent was aware of the condition of the title to the property listed by him for sale as he reviewed an abstract of the property. On April 6, 1987, prospective purchasers David and Donna A. Kiser (herein purchasers) viewed the real property at 2785 Adrian Avenue, Largo, Florida, and contacted Respondent at a telephone number observed on a "for sale" sign posted on the property. On that date, the purchasers executed a written offer to purchase the property, which offer was prepared by Respondent. (Petitioner's Exhibit 3). In conjunction with the offer to purchase, the purchasers tendered an earnest money deposit to Respondent, by cashier's check number 703917, dated April 10, 1987, in the amount of $100.00 made payable to P.M.M. Properties. The cashier's check was deposited into the escrow account of P.M.M. Capital, Inc., Sun Bank of Tampa Bay account number 265-014-3405 on April 15, 1987. The transaction closed on April 22, 1987. Following the closing, Graffunder issued a check number 140 written on the escrow account of P.M.M. Capital, Inc., Sun Bank/Southeast, account number 265-014-3405, dated April 22, 1987, made payable to Respondent in the amount of $100.00. The check was received by Respondent with Dahl's full permission and consent. Respondent represented to the purchasers that the seller, Dahl, had accepted their offer and desired to close the transaction immediately. Toward that end, Dahl came to Pinellas County from Sarasota County and executed all documentation necessary to effectuate the transfer on or before April 15, 1987. On April 15, 1987, Respondent met with the purchasers and had them sign all closing documents. This included execution of a closing statement and the Kisers requested an extension in order to obtain the $4,900.00 closing proceeds from Mrs. Kiser's father. On April 22, 1987, Mrs. Kiser presented the closing proceeds check and the transaction was finalized. That proceeds check and the $100.00 deposit check were both placed in Graffunder's operating account and pursuant to instructions from Dahl, Respondent received the closing proceeds as agent for Dahl. Dahl and the purchasers completed the closing by executing an Agreement for Deed on April 15, 1987. That agreement provides, in pertinent part, that the purchaser's would pay Dahl the total purchase price of $65,000.00 which included a down payment of $5,000.00 and monthly payments of $557.07 commencing May 1, 1987, and continuing for twenty-nine (29) months at which time the remaining principal balance of $60,073.18 would be payable in the form of a balloon payment. Dahl agreed to carry fire insurance for the full insurable value of the property and the purchasers were to have their names added to the policy as additional insureds. Additionally, both parties agreed that a Memorandum of Interest would be filed in the records of Pinellas County at the time of entering into the Agreement for Deed. Finally, the Agreement for Deed represented that there was a first mortgage in favor of Chrysler First and stated the condition that should the purchasers fail to make payments required of them within thirty (30) days after the same becomes due, the seller may, at his option, declare the contract null and void and all monies paid may be retained as full satisfaction and/or liquidated damages. Respondent did not provide the purchasers a warranty deed until approximately June 27, 1988, when he first became aware that Dahl had not given one to the Kisers. Respondent acknowledges that given the opportunity to reconstruct that transaction, he would have ensured that the seller provided a Warranty Deed to the purchasers as agreed in the Agreement for Deed. Respondent did not follow-up to ensure that a Memorandum of Interest was filed in the public records of Pinellas County as the parties agreed. Within months following the Riser's purchase of the subject property from Dahl, they became disenchanted with the property and ceased making payments under the agreement for Deed causing a large arrearage to accumulate and a subsequent mortgage foreclosure action was initiated.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED: The Petitioner enter a final order finding that an administrative fine of $500.00 be imposed upon Respondent and his license number 0432878 be placed on probation for a period of sixty (60) days with the condition that the fine be payable to Petitioner within thirty (30) days of entry of the final order. RECOMMENDED this 29th day of June, 1989 in Tallahassee, Leon County, Florida. 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 29th day of June, 1989. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Brian E. Johnson, Esquire Brian E. Johnson, P.A. 7190 Seminole Boulevard Seminole, Florida 34642 Kenneth Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0729 Darlene F. Keller, Division Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
The Issue Whether the Respondents committed the violations alleged and, if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency charged with the responsibility of regulating real estate licensees. At all times material to the allegations of this case, Respondent, Harold E. Hicks, was licensed as a real estate broker, license number 0136248. At all times material to the allegations of this case, Mr. Hicks was the qualifying broker for the Respondent corporation, Service First Realty, Inc. (the corporation), whose address is 9715 N. W. 27th Avenue, Miami, Florida 33147. The Respondent corporation holds license number 0223295. Mr. Hicks was responsible for the day-to-day business operations of the corporation. Mr. Hicks was responsible for the financial records kept and maintained by the corporation. All financial records at issue in this proceedings were in the name of the corporation. In 1996, an investigator employed by the Petitioner, Kenneth G. Rehm, attempted to conduct an audit of the Respondents' financial records. This audit was in response to a complaint not at issue in this proceeding. Mr. Rehm went to the Respondents' place of business and asked for the financial records for all real estate accounts. Mr. Hicks provided the investigator with records which established a negative escrow bank balance of $761.00. Moreover, there was no monthly reconciliation for the escrow account. Based upon the bookkeeping method used, the Respondents' records did not show how much money was being held in trust for individual clients. Respondents pooled money for different rental properties into one escrow account without establishing that they maintained accurate ledger balances per client. When Mr. Rehm was unable to reconcile the accounts, he elected to offer Respondents additional time to gather the records and to prepare for a complete audit. Such audit was assigned to Petitioner's investigator, Roberto Castro. Mr. Castro attempted to complete the follow-up audit of Respondents' financial records on February 13, 1996. Once again, the audit was hampered due to the lack of escrow account records. Based upon the records that were provided by Respondents, Mr. Castro computed that Respondents had $3,922.45 in outstanding checks from the rental distribution trust account but only $2,241.58 in the account. This calculation resulted in a shortage of $1,680.87. Mr. Castro also determined that Respondents were not completing monthly escrow account reconciliations in accordance with the rule promulgated by the Florida Real Estate Commission. On May 3, 1996, Respondents were served with a subpoena to provide Mr. Castro with all escrow records from February 1995 to February 1996. Respondents did not respond to the subpoena. As of the date of hearing, Respondents have not shown monthly escrow account reconciliations in accordance with the rule promulgated by the Florida Real Estate Commission.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding the Respondents guilty of violating Sections 475.25(1)(b), (e), and (k), Florida Statutes, and imposing an administrative fine in the amount of $1,500.00. It is further recommended that the Commission suspend Respondents' licenses until the Respondent Hicks has completed a seven-hour course in real estate escrow management and that such suspension be followed by a probationary period with monitoring of the Respondents' financial records to assure compliance with all Commission rules. DONE AND ENTERED this 25th day of November, 1997, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 1997. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Esquire Department of Business and Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Harold E. Hicks, pro se Service First Realty, Inc. 9715 Northwest 27th Avenue Miami, Florida 33147
Findings Of Fact At all times material to these proceedings, the Respondent McVety was a licensed real estate broker in Florida, having been issued license numbers 0461636 and 0258678. On January 1, 1989, the Respondent purchased the company Realty Services of Southwest Florida, Inc., a Florida corporation. One of the services provided by the corporation was property management. Rents and security deposits were collected from tenants of residential leases on behalf of property owners. In some cases, Respondent McVety was acting as an agent on behalf of property owners through the corporation. In other cases, Respondent McVety or the corporation was the actual property owner. When Respondent McVety took over the management of the corporation after his stock purchase, he noticed that the escrow account into which security deposits were placed, was a non-interest bearing account. On January 23, 1989, the escrow account was changed by the Respondent from an non-interest bearing escrow account to an interest bearing account. The tenants were not notified that their security deposits were now bearing interest. On March 17, 1989, a routine audit was conducted of the Respondent's escrow accounts. During the audit, it was discovered that one hundred and seventeen of the one hundred and thirty leases stated that the security deposits were being held in an non-interest bearing account. The leases which stated that the deposits were in an interest bearing account were signed after the Respondent purchased the corporation. The one hundred and seventeen leases with a non-interest bearing escrow were signed by the tenants prior to the stock transfer. There were no allegations that interest had actually been paid by the bank on the escrow account or that there had been any failure by the Respondent to account for the interest to the tenants, the actual owners of the funds. In mitigation, the Respondent stated that once he was made aware of the problems and truly understood the Department's concerns, a letter was sent to each tenant explaining the placement of the security deposits into an interest bearing escrow account on January 23, 1989. These letters were sent on April 3, 1989. In addition, a new real estate lease was prepared on behalf of the corporation by an attorney. The purpose of the new lease was to explicitly state the rights and responsibilities of the parties regarding the interest on these accounts. In this case, no one was cheated, no secret commissions were earned, and the sums in question were trifling.
Recommendation Accordingly, based upon the foregoing, it is RECOMMENDED: That the Respondent McVety be found guilty of having violated Rule 21V- 14.014, Florida Administrative Code, and is therefore in violation of Section 475.25(1)(e), Florida Statutes. This violation was originally Count II of the Administrative Complaint. Counts I and II, having been withdrawn, are dismissed. That the Respondent McVety be issued a written reprimand as the penalty for the one violation. DONE and ENTERED this 30th day of January, 1990, in Tallahassee, Leon County, Florida. Copies furnished: John R. Alexander, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 John A. McVety 3120 Grand Avenue Fort Myers, Florida 33901 Darlene F. Keller Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 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 30th day of January, 1990. Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, FL 32399-0792
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the license of Respondent, Annette J. Ruffin, to be a real estate broker. RECOMMENDED this 27th day of May, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of May, 1987.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, arguments of counsel and the parties, and the entire record compiled herein, the following relevant facts are found.2 John B. Roberts, a/k/a John B. Roberts, Sr., is registered as a real estate broker; is licensed as a broker salesman and has been issued License No. 0145010. (Petitioner's Exhibit 1.) As such, Respondent is subject to the licensing provisions contained in Chapter 475, Florida Statutes. During times material, Respondent was the active firm member broker of, and for, Gemco Realty Corporation which was, at that time, situated with an office at 3200 North Federal Highway, Boca Baton, Florida. On or about March 26, 1979, Respondent negotiated a Contract for Sale and Purchase wherein Jerald H. Malis agreed to purchase, for $190,000.00, Tract 87, Block 71, Palm Beach Farms Co., Plat No. 3, also known as 8298 Bridal Path, as recorded in Plat Book Pages 45/54 of the Public Records of Palm Beach County, Florida, from Louise and Marvin Norris. The stated property was listed for sale with Patterson and Workman, Inc., corporate brokers with offices located in Boca Raton, Florida. According to the subject contract, Respondent was to retain a $25,000.00 escrow deposit and the transaction was scheduled for closing on June 15, 1979. Marlene Patterson Rooks, a real estate broker since 1972, and a part owner of the brokerage firm, Patterson and Workman, Inc., represented the Norrises in the subject transaction. On numerous occasions from the time that the contract was entered through the scheduled closing dates, Ms. Rooks made inquiry of Respondent to ascertain whether the $25,000.00 earnest money deposit was in fact in escrow as required per contract. These inquiries were prompted based on an interoffice policy of Patterson and Workman, Inc., to verify escrow deposits when it is the listing agent and is selling through a brokerage office that it has not had prior dealings with. After repeated requests, including a personal visit to Respondent's office by Ms. Patterson, Respondent tendered to Ms. Patterson, a deposit receipt for what appears to be a $22,500.00 deposit which is, according to Respondent, a verification of the $25,000.00 earnest money deposit receipt. Respondent contends that the remaining difference was in fact placed in an escrow account of Creative Home Designs.3 Ms. Patterson had doubts as to whether the $22,500.00 deposit actually represented the $25,000.00 deposit which is the subject of this transaction inasmuch as the deposit receipt pre-dated the execution date of the subject contract by approximately one week. (See Petitioner's Exhibits 11 and 12). When Ms. Patterson was told that the subject transaction failed to close, she later received a mailgram declaring that the subject contract had been cancelled. (Respondent's Exhibit 5). Ms. Patterson immediately requested that a portion of the deposit monies be retained since, in her opinion, said commission monies had been earned by the listing agency. (Respondent's Exhibit 6). Eleanor Britter, a loan officer for First Federal of Broward, processed a loan application for the purchaser, Jerald H. Malis. The loan application was approved by First Federal at an interest rate of 11 1/2%. (See Petitioner's Composite Exhibit 13, and Respondent's Exhibit 7). On August 23, 1978, Gemco Realty Corporation's active firm member broker and owner was Michael Eisenrod. During this period, Deborah Parnell was a registered real estate salesperson associated with Gemco Realty. On August 23, 1978, salesperson Parnell negotiated a Contract of Purchase and Sale whereby Lou Demarco, Inc., a Florida corporation, and Lou Demarco individually, agreed to sell Lot 38, Block 4, Boca Raton, Bath and Tennis Club, also known as 2000 N.W. 29th Road, Boca Raton, Palm Beach County, Florida; and to build thereon a house for purchaser de Buitrago on which contract de Buitrago gave a $15,000.00 earnest money deposit to Gemco Realty Corporation. That deposit was placed into the escrow account of Gemco Realty Corporation. (Credited Testimony of Eisenrod.) On September15, 1978, Respondent then a registered real estate salesman, became associated with Gemco Realty Corporation. In November, 1978, Respondent became registered as a real estate broker and on February 19, 1979, Respondent purchased Gemco Realty Corporation from its owner-broker, Michael Eisenrod, and became the corporation's only active firm member-broker. (Petitioner's Exhibit 3.) At the time of the purchase, the stated $15,000.00 deposit on the Demarco contract was in the escrow account of Gemco Realty. At this time, the Demarco contract had not closed. The Demarco contract ultimately failed to close and the parties to the contract agreed to disburse the $15,000.00 deposit as follows: $12,500.00 to purchasers; $1,100.00 to salesperson Deborah Parnell; and $1,400.00 to Michael Eisenrod, the former active firm member-broker and owner of Gemco Realty Corporation. (Petitioner's Exhibit 8). Confirmation of this disbursement agreement was acknowledged by Respondent in his letter dated June 20, 1979, to Respondent's lawyer, John Downing of Fort Lauderdale, Florida. Pursuant to the terms outlined in the referenced letter, Respondent was to deliver to attorney Downing, his escrow check in the amount of $13,600.00 which represented the total disbursement to the purchaser and salesperson Parnell.4 Respondent has not returned the deposit monies referred to from the Demarco contract to date. Rebecca Ritter, the head bookkeeper for Royal Beach Trust Company of Palm Beach, Florida, appeared and acknowledged that Respondent had escrow accounts at Royal Beach Trust Company during the period January, 1979, through July 30, 1979. (See Petitioner's Exhibit 15). During times material herein, Respondent was the only active firm member of and for Gemco Realty Corporation. During this period, Respondent has his trust and escrow accounts in general accounts in the following banking institutions: First Bank and Trust Company of Boca Raton, Florida; Boca Raton National Bank, Boca Raton, Florida; and Royal Trust Bank of Palm Beach, Boca Raton, Florida. On April 30, 1979, Respondent issued, on its trust account at First Bank and Trust Company of Boca Raton, checks numbered 0548 and 0549, each in the amount of $50,000.00, payable to Creative Home Designs, Inc. Neither check was honored when presented for payment and the reason being that the checks were returned due to "uncollected funds." (Petitioner's Exhibit 7). Also, on April 12, 1979, Respondent issued on its trust account at First Bank and Trust Company of Boca Raton, Florida, its check No. 0592 in the amount of $3,000.00 payable to Lou Demarco, Inc., and Nicholas Brooks. This check was also not honored when presented for payment for reason "uncollected funds." Respondent's defense to these allegations are that he had in fact made the $22,500.00 deposit in a timely manner and that an additional deposit was on hand in the deposit of another company that he owned, Creative Home Designs, in the amount of $2,500.00. He contends that Ms. Patterson requested evidence to ascertain that the escrow deposit was in fact made and that such evidence was provided her. Respondent further contends that when purchaser Malis considered the contract to purchase cancelled, he merely related Malis' request to Ms. Patterson and that he presented Malis a refund in the form of a $25,000.00 check which Malis never processed. Respondent contends further that an accounting of the escrow accounts from Gemco Realty indicated that the accounts were in shambles when he purchased the operation and that there was less than the $15,000.00 deposit on hand when he assumed ownership of the corporate escrow accounts. Respondent acknowledged that several checks were returned inasmuch as he was attempting to separate the new escrow deposits from the old in an effort to get a true accounting of the escrow accounts. Respondent expressed his opinion that the $15,000.00 escrow deposit respecting the Demarco transaction was never placed in the escrow account. Further, Respondent contends that to the extent that monies were made on the Demarco transaction, that that payment was partially repaid in the form of a $3,000.00 check which represented a partial payment. (Respondent's Exhibit 4). Respondent also acknowledged that he agreed to the disbursement of deposit funds from the Demarco transaction as set forth herein but that they buyer later refused to close the transaction and forfeited, in Respondent's opinion, his deposit. According to Respondent, he then attempted to get the earnest money deposits returned to the purchasers. Respondent opined that the buyer forfeited the escrow deposit tendered to Gemco Realty. Finally, Respondent contends generally that the Gemco accounts were incorrect and that he was "duped" into accepting Messr. Eisenrod's accounting as of the date that he assumed, control of the Gemco Realty Corporation's escrow accounts. Respondent also allowed that he had on deposit,, two (2) $50,000.00 checks which were returned and as a result also created checks that he had written to also be dishonored when presented for payment.5
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent's license to practice real estate as a broker be revoked. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 24th day of June, 1981. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1981.
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what action should be taken.
Findings Of Fact At all times material hereto, Louis M. Loguercio (Respondent) was licensed in the State of Florida as a real estate salesperson, having been issued license number 0609113. From March 11, 1996, through July 13, 1997, Respondent was a salesperson for CMT Holding Ltd., a partnership trading as The Prudential Florida Realty. Martha Meloni and her husband, Mario Meloni, (Sellers) owned residential property located at 6412 Southwest 127 Court, Miami, Florida. The Sellers' property was listed for sale with Jorge "Ivan" Salomon, a broker operating his own company, Real One Realty Corporation. On May 1, 1997, Carlos Castellanos and his wife, Daritza Jiminez, a/k/a Daritza Jiminez-Castellanos, (Buyers) met Respondent at his office at The Prudential Florida Realty. They were referred to Respondent by one of his clients. The Buyers were from Venezuela and had had no contact with Respondent prior to this transaction. On May 1, 1997, Respondent prepared a draft Residential Sale and Purchase Contract (Contract) for the purchase of the Sellers' property for $150,000 by the Buyers. Respondent drafted the Contract on behalf of the Buyers and prepared the contract while the Buyers were in his office. The terms of the Contract required an initial deposit of $2,000 from the Buyers to be held in escrow by Steven Greenspan Law Office, as "Escrow Agent." The Contract also required a $13,000 additional deposit to be made within ten (10) days of the date of the Contract. While the Buyers were in Respondent's office, they wrote two checks, and signed them, for deposits on the property: one for $2,000 dated May 1, 1997, and one for $13,000 dated May 15, 1997. The checks were made payable to Alan Greenspan, P.A. The Buyers wrote both checks with Respondent's assistance. The Buyers wanted to personally take the $2,000 deposit check to Alan Greenspan, the escrow agent. The Buyers permitted Respondent to photocopy the checks while they were in Respondent's office. Once the checks were photocopied, Respondent returned the checks to the Buyers. Respondent advised the Buyers to deliver the $2,000 check to the escrow agent that day and to mail the second check by the due date. Mr. Greenspan's office was in the same building as the mortgage company that the Buyers were using for the purchase of the property. His office was also in close proximity to Respondent's office. The Buyers failed to deliver the $2,000 deposit check to Mr. Greenspan on May 1, 1997. Respondent did not know that the check had not been given to Mr. Greenspan by the Buyers. Mr. Greenspan received a copy of the Contract. He did not contact any of the parties to the Contract regarding the escrow monies. As an escrow agent, Mr. Greenspan's office handles a large volume of closings and it is possible, according to him, that his staff assumed that the escrow monies had been received. No one in Mr. Greenspan's office verified that the monies had been received. Prior to the due date for the payment of the second deposit of $13,000, Respondent contacted the Sellers' listing agent, Mr. Salomon, and informed him that the Buyers were having problems paying the second deposit. Shortly after the due date for the payment of the second deposit, Mr. Salomon contacted Respondent, who informed Mr. Salomon that the Buyers had the money. Respondent also faxed Mr. Salomon a copy of the two checks for the two deposits, which were written on May 1, 1997. Mr. Salomon faxed a copy of those checks to the Sellers. Respondent did not inform Mr. Salomon that the Buyers had not given the deposit checks to him. Unbeknownst to Respondent, the Buyers had also failed to mail the second deposit of $13,000 to Mr. Greenspan. Mr. Salomon, having received the fax copy of the checks, assumed that the escrow agent had the Buyers' deposits. The Sellers, having received the fax copy of the checks, assumed also that the escrow agent had the Buyers' deposits. Mr. Greenspan became aware that his office did not have the Buyers' deposits in escrow when the mortgage company requested that he provide an escrow letter. He contacted the Sellers' attorney, who faxed a copy of the Buyers' checks. At that time, Mr. Greenspan became concerned regarding the Contract because the Contract made it appear that he, as the escrow agent, had deposits that he did not have. Mr. Greenspan contacted Respondent regarding the absence of the escrow deposits. Respondent was apologetic and responded to Mr. Greenspan that he (Respondent) was sorry that the Buyers had not given him (Mr. Greenspan) the deposits as they had indicated that they would do. After being contacted by Mr. Greenspan, Respondent attempted to contact the Buyers. He was unsuccessful. The Sellers did not become aware that none of the deposits were in escrow until the day before the scheduled closing on the property. In the manner in which Respondent handled the Buyers' deposits, he failed to follow office policy and practice of The Prudential Florida Realty. According to the office policy and practice, the sales associate handling the transaction has the duty to ensure that the buyer's deposit(s) are deposited with the designated person or entity at the designated time or date. Respondent also failed to advise the Sellers' agent, Mr. Salomon, or the escrow agent, Mr. Greenspan, the Sellers' attorney, or the Sellers that the Buyers had not given him any deposits.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Louis M. Loguercio. DONE AND ENTERED this 29th day of April, 1999, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1999.
The Issue The issue presented is whether Petitioners are entitled to recover from Respondent the attorney's fees and costs incurred by Petitioners, pursuant to the Florida Equal Access to Justice Act.
Findings Of Fact At the time material hereto, Global Real Estate and Management, Inc., was a corporation registered as a real estate broker in the state of Florida, Mark H. Adler was a real estate broker licensed in the state of Florida, and Richard Shindler was a real estate salesman licensed in the state of Florida. Adler was the qualifying broker for Global, and Shindler was employed by Global. On November 17, 1989, the Department of Professional Regulation, Division of Real Estate, received a written complaint about Adler, Shindler, and Global from Jay Hirsch, a real estate broker licensed in the state of Florida. Hirsch's complaint included the following allegations. Shindler had entered into two contracts for the purchase of real estate which required Shindler to place a total of $11,000 in Global's escrow account. Requests for verification of the deposit of such funds had been ignored. Hirsch had told Shindler at the time that the contracts were executed and on numerous occasions thereafter that since Shindler had chosen to participate in the real estate commission to be earned from the transaction, Shindler had assumed a fiduciary relationship with the sellers. Shindler had arbitrarily refused to close pursuant to the contracts and on October 2, 1989, Hirsch met with Shindler, reminded Shindler of Shindler's fiduciary responsibil-ities to the sellers, made demand on Shindler for the escrow deposit on behalf of the sellers, and advised Shindler of the provisions of Florida law relating to the responsibilities of the escrow holder when demands are made for release of escrowed money. Written demand was made on Adler within days of the oral demand. Hirsch subsequently spoke with Adler, the broker of record for Global, regarding the legal requirements in escrow deposit disputes but discovered that Adler "knew nothing" about the transaction. Shindler and Adler continued to ignore the demands made on them for the escrow deposit. Hirsch also alleged that there may be "certain other irregularities" regarding fiduciary responsibilities, entitlement to commissions by Global, and conflicts of interest. An investigator was assigned to investigate Hirsch's complaint against Adler, Shindler, and Global. According to the investigative report issued on February 12, 1990, that investigation revealed possible serious violations of the laws regulating the conduct of real estate brokers and salespersons. Although the investigative report recited that Global waited two months after the initial deposit demand was made by Hirsch before it filed an interpleader action to resolve conflicting demands on the escrow deposit, the documentation attached to the investigative report clearly indicated that Global waited just a few days short of three months before filing the interpleader action. The investigative report further revealed that during the time that at least the $11,000 was required to be in Global's escrow account (if Global were not involved in any other real estate transactions at the time), the escrow account had less than an $11,000 balance for both the months of September and October of 1989. The report further indicated that the IRS had attached Global's escrow account for Global's failure to pay payroll taxes. The investigative report revealed that there had been a problem obtaining broker Adler's presence for the interview with the Department's investigator. When a joint interview with both broker Adler and salesman Shindler did take place, the broker was unable to answer any of the investigator's questions, telling the investigator that he knew little regarding the problems since he relied on salesman Shindler to operate the business on a daily basis. In response to the investigator's continued questioning as to how IRS was able to attach an escrow account, Shindler explained that although the checks were marked escrow account, the bank statements did not reflect an escrow account but rather reflected a "special account." It was further discovered during the investigation that broker Adler had not been a signatory on the escrow account; rather, salesman Shindler had been the only signatory on the escrow account. At the conclusion of that interview, Shindler, who had taken control of the interview, agreed to supply the Department's auditors with all IRS and bank correspondence relative to the escrow account attachment. During that same joint interview on January 23, 1990, when questioned about the real estate transactions which were the subject of broker Hirsch's complaint, Shindler spoke in terms of having "his" attorney file an interpleader action (although he was the buyer). He also talked about oral extensions to the written contracts. Shindler also explained that his "deposit moneys" were in the escrow account because he was using a part of sale proceeds belonging to his brother as his down payment on purchases made for himself, an explanation which suggested there might be co-mingling of funds. A complete audit of Global's escrow account by the Department's auditors was scheduled for February 7, 1990. A supplemental investigative report was issued on May 3, 1990. That report contained the following recital. Shindler and Adler had failed to comply with the Department's requests for files and bank statements so that an audit could be conducted on the escrow and operating accounts. On March 22, 1990, a subpoena was served on Global requiring those records to be made available by April 3. As of April 30, complete records were still not submitted in that case files were not available and certain checks and monthly bank statements were missing. Therefore, an appointment was made to conduct the audit in Global's office on May 1 with the requirement that broker Adler be present. On that date, files were still not available and bank records were incomplete, precluding the conduct of a proper audit. Adler told the investigator on that date that Shindler had not even told Adler that a subpoena had been served, which statement reinforced the investigator's belief that salesman Shindler had been operating as a broker and running the business operations of Global, with broker Adler merely lending his license. On that same date Shindler changed his explanation of the escrow account shortages, saying the IRS had not garnished the escrow account; rather, Global's bank had transferred $3,200 from Global's "escrow" account to Global's operating account to cover checks written on Global's operating account when the account did not have sufficient funds. It was also discovered that Adler had not been performing monthly reconciliations of Global's "escrow" account. Adler told the investigator that he would supply files and reconciliations by June 1, 1990. A supplemental investigative report was issued on June 12, 1990, advising that although the subpoena return date had been extended to June 1, 1990, as of June 12 Adler had still failed to respond by producing the required records. On June 19, 1990, the Probable Cause Panel of the Florida Real Estate Commission considered the investigative reports and determined that there was probable cause to believe that Adler, Shindler, and Global had violated statutes regulating the conduct of real estate brokers and salespersons. The administrative complaint recommended to be filed by the Probable Cause Panel was issued by the Department of Professional Regulation, Division of Real Estate, on June 21, 1990, against Mark H. Adler, Richard Shindler, and Global Real Estate and Management, Inc. That Administrative Complaint contained factual allegations regarding Shindler's contracts to purchase properties listed by broker Hirsch, regarding the alleged "verbal" extensions of the closing dates in the written contracts, regarding the repeated demands on broker Adler for release of the escrowed money as liquidated damages, and regarding the lengthy delay in responding to those demands. The Administrative Complaint also contained factual allegations regarding Shindler's use of a part of sale proceeds due to his brother as his own down payment on the properties and regarding the escrow account balance which was less than $11,000, the minimum balance required to be maintained in Global's escrow account if there were no other sales pending. Also included were factual allegations regarding the alleged attachment of Global's escrow account by the IRS for failure to pay payroll taxes, regarding the fact that broker Adler was not a signatory on the escrow account, and regarding Adler's reliance on Shindler to operate the real estate brokerage office on a daily basis. The Administrative Complaint also recited the failure of the Respondents to comply with the subpoena served on Global by the Department, which precluded the possibility of conducting a proper audit of Global's account. Factual allegations were included reciting that on May 1, 1990, Shindler had acknowledged that he had been operating as a broker and running the real estate brokerage business of Global with broker Adler "lending his license." In addition, the Administrative Complaint recited Shindler's original explanation that the IRS had attached the escrow account, which explanation was later changed by Shindler to be that Global's bank had taken $3,200 from Global's escrow account to cover checks written against Global's operating account when there were not sufficient funds in that operating account. Lastly, the Administrative Complaint alleged that Adler had not done monthly reconciliation statements of the escrow account from October of 1989 through the date of the Administrative Complaint. Based upon those factual allegations, the Administrative Complaint alleged that Adler was guilty of culpable negligence or breach of trust in a business transaction (Count I), that Shindler was guilty of culpable negligence or breach of trust in a business transaction (Count II), that Global was guilty of culpable negligence or breach of trust in a business transaction (Count III), that Adler was guilty of having failed to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized (Count IV), that Global was guilty of having failed to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized (Count V), that Adler was guilty of having failed to produce for inspection records when subpoenaed by the Department (Count VI), that Global was guilty of having failed to produce for inspection records when subpoenaed by the Department (Count VII), that Shindler was guilty of having failed to deposit funds with his employing broker (Count VIII), and that Shindler was guilty of having operated as a broker while being licensed as a salesman (Count IX). The Administrative Complaint sought disciplinary action against Adler, Shindler, and Global for those alleged violations. Adler did not seek a formal hearing regarding the allegations contained within that Administrative Complaint. Rather, he entered into a settlement agreement with the Department, agreeing that all of his real estate licenses, registrations, certificates, and permits would be suspended for a period of eighteen months, that he would resign as an officer and/or director of Global, and that he would testify at any formal hearing held regarding the Administrative Complaint. Adler also agreed that notice would be published that he had been suspended for 18 months for culpable negligence and failure to properly supervise a licensed salesman in his employ. That agreement was approved by the Florida Real Estate Commission in a Final Order filed of record on August 31, 1990. On the other hand, Shindler and Global did request a formal hearing regarding the allegations contained in that Administrative Complaint. The matter was subsequently transferred to the Division of Administrative Hearings for the conduct of that formal hearing and was assigned DOAH Case No. 90 That formal hearing was conducted on January 9, 1991. Based on the evidence presented during that final hearing, a Recommended Order was entered on March 20, 1991, finding that the Department had failed to prove its allegations as to Shindler and further finding that the Department had failed in its burden of proof as to two of the three counts against Global. The Recommended Order did find that Global failed to maintain trust funds as alleged in Count V of the Administrative Complaint and recommended that Global be ordered to pay an administrative fine in the amount of $500. That Recommended Order was adopted in toto by the Florida Real Estate Commission in its Final Order filed on April 24, 1991. It is clear that Shindler prevailed in the underlying administrative action and that Global prevailed as to two of the three counts against Global. The Department was substantially justified in initiating the underlying administrative proceeding against both Shindler and Global. At the time that the underlying action was initiated, it had a reasonable basis both in law and in fact.
