Findings Of Fact Petitioner is the governmental agency responsible for issuing real estate licenses and regulating licensees on behalf of the state. Respondent, Gregory T. Franklin ("Franklin"), is licensed in the state as a real estate broker; license number 0314387. The last license issued was as a real estate broker, c/o Equity Realty of South Florida, Inc., t/a Equity Realty, 5809 Southeast Federal Highway #200, Stuart, Florida 34997. Respondent, Equity Realty of South Florida, Inc. ("Equity"), is a corporation registered as a real estate broker; license number 0229264. Respondent, Franklin, is the qualifying broker for Respondent, Equity. On or about January 26, 1990, Mr. Robert Warren (the "buyer") entered into a contract to purchase real estate from Ms. J. Zola Miller and Ms. Adrianne Miller Hill (the "sellers"). The buyer gave Respondent an earnest money deposit in the amount of $1,000. On or about April 17, 1990, a second contract was executed by the buyer and sellers. The buyer gave Respondents a second earnest money deposit in the amount of $24,000. Both earnest money deposits were timely deposited to Respondents' escrow account, number 0194101404, Florida Bank, Stuart, Florida. The buyer and sellers had difficulty in closing the contract due to disagreements concerning conditions in the contract. At the buyer's request, Respondents used the earnest money in the amount of $25,606.04 to purchase a certificate of deposit ("CD") in the name Robert Warren Century 21 Equity Realty Escrow Account #050-215-76, located at the First Marine Bank of Florida, Palm City, Florida ("First Marine"). Respondents received the sellers' verbal approval, but not written approval, for the purchase of the CD. Respondents notified the Florida Real Estate Commission (the "Commission") on August 28, 1990, that there were conflicting demands for the $25,000 earnest money deposit. Respondents stated their intent to claim a portion of the earnest money as an earned commission and stated that they were preparing to file an interpleader action to resolve the parties' dispute over the earnest money deposit. The Commission acknowledged Respondents' notification. Negotiations between the buyer and sellers continued until December 12, 1990. At that time, the parties reached an impasse, and each made written requests for the escrow deposit. Respondents maintained the earnest money in the CD until February 8, 1991. On February 8, 1991, Respondents were notified by First Marine that the buyer was attempting to obtain the escrow monies directly from First Marine. Respondents opened a CD in the name of Robert Warren Escrow Account for Equity Realty by Gregory Franklin, Account #200-517-7320, First Union Bank of Florida, Stuart, Florida. When the CD matured on May 15, 1991, the amount of the deposit was $25,989.57. On May 15, 1991, Respondents removed the earnest moneys and invested them in CD #10696954 at Community Savings Bank. On June 19, 1991, Respondents withdrew $500, paid a penalty of $6.21, and closed the CD. The remaining balance was used to open CD #10707413 at Community Savings Bank. On June 21, 1991, Respondents withdrew $600 and paid a penalty in the amount of $8.67. Respondents used half of the $600 withdrawal to pay an attorney to initiate a civil interpleader action without the knowledge or consent of either the buyer or seller. On August 23, 1991, Respondents closed the CD and withdrew the balance. On August 23, 1991, Respondents opened CD 310725647 in the name of Equity Realty, Inc., with the balance at Community Savings Bank. On October 30, 1991, Respondents made a withdrawal in the amount of $175. On November 23, 1991, the CD was renewed. The account was closed on November 27, 1991, with a balance of $25,456.94, and deposited into the court registry. The interpleader action was ultimately resolved pursuant to a settlement agreement between the parties. Respondents obtained the consent of both parties, though not the written consent of both parties, before placing the escrowed funds into an interest bearing account on August 15, 1990. The uncontroverted testimony of Respondent, Franklin, concerning this issue was credible and persuasive. Neither the sellers nor the buyer ever revoked their consent. Respondents deposited the earnest moneys into an interest bearing account without designating who was to receive the interest from such an account without the consent of both parties. Respondents took appropriate action to resolve the conflicting demands made upon the earnest moneys deposited with Respondents but failed to take such action in a timely manner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondents guilty of placing escrow funds in an interest bearing account without designating who is to receive the interest in violation of Florida Administrative Rule 21V- 14.014. It is further recommended that Petitioner should issue a written reprimand to Respondents and require Respondent, Franklin, during the next 12 months, to document to the satisfaction of Petitioner that he has completed 14 hours of the Brokerage Management Course. RECOMMENDED this 22nd day of January, 1993, 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 22nd day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3323 Petitioner's Proposed Findings Of Fact. 1.-6. Accepted in Finding 1. 7.-8. Accepted in Finding 2. 9.-11. Accepted in Finding 3. Accepted in Finding 4. Accepted in Finding 5. Accepted in Finding 3. Accepted in Finding 6. Accepted in Finding 7. 17.-20. Accepted in Finding 8. 21.-22. Accepted in Finding 9. 1.-6. Accepted in Finding 1. 7.-8. Accepted in Finding 2. 9.-11. Accepted in Finding 3. 12. Accepted in Finding 4 13. Accepted in Finding 5. 14. Accepted in Finding 3. 15. Accepted in Finding 6. 16. Accepted in Finding 7 17.-20. Accepted in Finding 8. 21.-22. Accepted in Finding 9. 23.-24. Accepted in Findings 10.-11. Respondents' Proposed Findings Of Fact. 23.-24. Accepted in Findings 10.-11. COPIES FURNISHED: Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Department of Professional Regulation, Division of Real Estate Legal Section - Suite N 308 Hurston Building North Tower 400 West Robinson Street Orlando, Florida 32801-1772 Gregory T. Franklin, pro se %Equity Realty of South Fla., Inc. 5809 S.E. Federal Highway, #200 Stuart, Florida 34997 APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3323 All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract." The contract described in paragraph 3 did not close. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part: The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott. However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for $18,500.00, plus its costs and attorney's fees. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford." On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations. DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX TO CASE NO. 89-2517 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 4 are accepted. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record. Paragraphs 6 and 7 are accepted. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record. Paragraph 9 is accepted but is irrelevant. Paragraph 10 is accepted. Paragraph 11 is rejected as irrelevant. Paragraph 12 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Glenn M. Blake Blake & Torres, P.A. 200 South Indian River Drive Suite 101 Fort Pierce, Florida 34950 Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact At all times relevant to the charges brought against the Respondent, Jimmy D. Hill, he was a licensed real estate broker in the State of Florida, holding license number 0144888. On June 20, 1983, a contract for the purchase of Unit 219 in Polynesian Village in Bay County, Florida, was signed by Margaret Gorshi and Glenn Coker. The buyers paid a total of $3,000 as an earnest money deposit which the Respondent deposited into his escrow account at Bay Bank and Trust Company in Panama City. This real estate transaction was subject to the buyers obtaining 90 percent financing, and it was scheduled to close on or before September 15, 1983. The transaction did not close because the buyers were not able to obtain the necessary financing, and in September of 1984 the buyers requested that their earnest money deposit be returned. On September 27, 1984, the Respondent's office manager forwarded a check for $3,000 dated September 24, 1984, to the buyers. This check was drawn on the Respondent's escrow account at Bay Bank and Trust Company in Panama City. This check was presented for payment in November of 1984, but it was not paid by the bank, and was returned because of insufficient funds in the Respondent's escrow account. The Respondent's escrow account was closed in July of 1985 without this check having been honored. Sometime prior to the issuance of the check to refund the buyer's deposit, another check in the amount of $5,400 was cashed at Bay Bank and Trust Company, drawn on the Respondent's business checking account at First National Bank. When this check was not honored by First National Bank due to insufficient funds, it was returned to Bay Bank and Trust Company. Upon receipt of this dishonored check, Bay Bank and Trust Company departed from its standard banking policy by charging the full amount thereof against the Respondent's trust or escrow account. As a result, the Respondent's escrow account became out of balance by $5,400. The Respondent's escrow account balance was at least $3,000 from June, 1983, through July, 1984. This balance was $1,600 on August 31, 1984; $1,600 on September 30, 1984; $600 on October 31, 1984; and from November 1984, through July, 1985, when the account was closed, the escrow account balance was $585. Without the unauthorized debit of $5,400, the balance was sufficient to enable the refund check to the buyers in the amount of $3,000 to clear. Although the Bay Bank and Trust Company issued a debit memo reflecting the charge of $5,400 to the Respondent's escrow account, the Respondent did not receive it. He testified that it must have been intercepted or diverted from him, by office personnel. The Respondent learned that his $3,000 check to the buyers had bounced in November or December, 1984. On February 25, 1985, the Respondent issued a replacement check for $3,000 to purchase a cashier's check which he intended to forward to the buyers. This check was given to an office employee to purchase the cashier's check, but the employee did not do so. Approximately three months later, in May of 1985, the Respondent was notified by an attorney for the buyers that they had not received the refund. The buyers had retained this attorney to obtain their refund from the Respondent, and after two or three discussions with the attorney, the Respondent finally forwarded his check for $3,400 plus, to counsel for the buyers in August of 1985. Although the Respondent's first refund check was caused to bounce by the bank's unauthorized charge of another check to his escrow account, the Respondent was negligent in not reviewing his escrow account statements so as to be informed of the bank's charge to his escrow account. The Respondent also failed to follow-up to assure that the buyers received the first replacement check when it was written in February, 1985. He did not regularly review the balances in his escrow account monthly after July of 1984, and only when he was contacted by the Real Estate Commission's investigator did he perform a thorough reconciliation of his escrow account in July, 1985. The Respondent also failed to supervise his employees and establish policies pertaining to review and verification of the balances in his escrow account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Jimmy D. Hill, trading as Jim Hill Associates, be assessed an administrative fine of $1,000. THIS RECOMMENDED ORDER entered this 25th day of September, 1986 in Tallahassee, Leon County, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 FILED with the Clerk of Division of Administrative Hearings this 25th day of September, 1986. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-1067 Department of Professional Regulation, Division of Real Estate vs. Jimmy D. Hill, t/a Jim Hill Associates Case No. 86-1067 Rulings on Petitioner's Proposed Findings of Fact: 1-10. Accepted. 11. Rejected because not a factual finding. 12-17. Accepted. Rulings on Respondent's Proposed Findings of Fact: (Paragraphs not numbered, but referred to in order.) Accepted. First sentence accepted. Second, third and fourth sentences rejected as not supported by corroborating evidence and thus are self-serving. Fifth, sixth and seventh sentences accepted. First sentence accepted. Second and third sentences rejected as not supported by corroborative evidence and thus are self-serving. Accepted. Accepted. First sentence accepted. Second and third sentences rejected as irrelevant. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Michael C. Overstreet, Esquire 225 McKenzie Avenue Panama City, Florida 32401 Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings S. Benton, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
The Issue Whether the Respondent is guilty of fraud in violation of Section 475.25(1)(b), Florida Statutes. Whether the Respondent is guilty of having failed to account and deliver trust funds in violation of Section 475.25(1)(d), Florida Statutes. Whether the Respondent is guilty of having failed to immediately place upon receipt deposits received in trust and to maintain said trust funds in the real estate brokerage trust account until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. Whether the Respondent is guilty of having failed to make available to the Petitioner or its authorized representative all bank statements for all escrow accounts including cancel led checks, all check books and pending contracts and all documents pertaining to all escrow accounts and for having failed to make available such books and accounts to the Petitioner or its authorized representative at a reasonable time during regular business hours, as required by Rule 21V-14.012, Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes. Whether the Respondent is guilty of having failed or refused to appear at the time and place designated on the Subpoena Duces Tecum, served October 10, 1988, with respect to an official investigation of alleged violations of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(h), Florida Statutes, and Section 475.25(1)(e), Florida Statutes.
Findings Of Fact Petitioner is a state government 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 Section 20.30, Florida Statutes, Chapters 120,455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0125817 in accordance with Chapter 475, Florida Statutes. The last license issued to the Respondent was as a broker with a business address of 1605 Main Street. Suite 810, Sarasota, Florida 34236 and a home address of 3409 Prudence Drive, Sarasota, Florida 34235. From on or about November, 1984 to on or about May, 1988, the Respondent was employed by the Boathouse on Longboat, Ltd., a Florida limited partnership, to sell condominium boat storage berths for the limited partnership in which Respondent was a limited partner. On April 15, 1988, Harold Kornhaus, made a offer to purchase a storage space in the amount of $19,500.00. The offer by Harold Kornhaus was not for a specific size storage berth but the berth was to be a specific size. An agent of the Respondent named Michael Tewksbury took the offer from Harold Kornhaus and stated he was obligated to present the offer to the Respondent. The Kornhaus offer was delivered to the Respondent who never presented it to the general partner, Barry R. Lewis. The Respondent changed the Kornhaus offer by changing the first page and indicating another seller, named Currier but otherwise left all other pages as drawn by Tewksbury. The Respondent represented individual limited partners at the expense of the partnership entity by having one of the limited partners, Currier, purchase a storage space at a reduced amount and then reselling that space at a profit to a purchaser, Kornhaus. The Respondent and /or his agent Tewksbury handled the transaction, and received a commission. In another transaction involving the Huntsman to Bradt contract written on April 28, 1988, the Respondent wrote an escrow check at closing on April 28, for $1,950.00, which check was dishonored due to insufficient funds on account. Herbert Jacobs, chairman of Ajax Paving Industries, Inc., of Florida, a renter of space at the Boathouse of Longboat, decided to buy a storage space for his company. The Respondent arranged to sell a storage space to William Pettibon, who was a limited partner. The contract selling William Pettibon a storage space was written on February 1, 1988, for storage space #2325. On April 1, 1988, the Respondent arranged to sell Pettibon's unit #2325 to Herbert Jacobs, chairman of Ajax Paving Industries, Inc. On April 28, 1988, the limited partnership records show the bank balance in the Respondent's escrow account should have been $44,436 when in fact there was a negative balance of $1,120.82. Naples Federal Savings and Loan Association loaned approximately $987,500.00 to the limited partnership. One of the conditions of the loan was that Respondent's escrow account pertaining to all sales contracts, deposits, etc., for the limited partnership be placed with Naples Federal. On February 26, 1987, Respondent wrote a letter to William T. Kirtley, attorney for the limited partnership, and stated that the total balance in the Boathouse escrow account was $82, 109.85. The Respondent could not make a proper accounting of his escrow account on that date, and misrepresented to Mr. Kirtley that he had in excess of $80,000 in his escrow account. On December 22, 1987, the Respondent wrote check No. 151 from the escrow account to Mr. Edward Lerian "Larry" Ay, Jr., in the amount of $11,500. Mr. Ay was a contracted buyer of a boat storage unit and had made a personal loan to the Respondent in the amount of $10,000 in December, 1986. The $11,500 check from the Respondent to Mr. Ay was repayment of the loan, plus $1,500 in interest. Mr. Ay thought that he was loaning money to the Boathouse of Longboat, Ltd., the limited partnership, but such was not the case. The Respondent had no valid reason for writing Mr. Ay a check from the escrow account. The Respondent did not have the prior consent of the general partner for either the loan or the use of escrowed funds. On October 27, 1987, Respondent wrote two checks from the escrow account to David Buyher in respective amounts of $5,317.50 and $187.50. The checks represented repayment of a loan, with interest, made to Respondent by Buyher in 1986. Respondent was without authority to use escrow funds for said purposes. On February 26, 1988, the Respondent wrote check number 203 from the limited partnership escrow account in the amount of $616.73 to the "Mountain Chalet" in Snowmass Village, Colorado. The funds were used for the personal lodging and other services of the Respondent and was done without authority. On March 28, 1988, Respondent wrote check No. 236 in the amount of $10,873.11 to himself. On April 28, 1988 Respondent wrote check No. 258 in the amount of $14,600 also to himself. The two checks referred to above were used to obtain cashiers checks to be used at real estate closings. Respondent was fired as the real estate broker for the Boathouse of Longboat, Ltd., in May, 1988. In August and September, 1988, during Petitioner's investigation, several appointments were made with the Respondent to review the Respondent's escrow account which appointments the Respondent cancelled. On the day of the fifth appointment, the Respondent called and cancelled. The Respondent stated he would not permit the account to be reviewed without a subpoena. On or about October 10, 1988, the Respondent was served with a Subpoena Duces Tecum commanding him to produce for inspection and copying at 1605 Main Street, Suite 810, Sarasota, Florida 34236 on October 10, 1988, at 10:00 a.m., for the Department of Professional Regulation "all bank statements for all escrow accounts including cancelled checks from September 1, 1987 to the present time. All checks books and pending contracts and all other documents appertaining to all escrow accounts." Respondent did not comply with the Subpoena Duces Tecum on October 10, 1988. On or about October 14, 1988, a Subpoena Duces Tecum was properly served on Thomas E. Finley, First Vice President or the Custodian of Records, Naples Federal Savings and Loan Association, 5801 Pelican Bay Boulevard, Naples, Florida 33941-3004 commanding that such Custodian of Records appear at the Petitioner's Office of Investigative Services on October 18, 1988, at 11:00 a.m., and have with him "all bank statements and checks from June 1, 1987, through June 30, 1988, appertaining to the escrow account of Michael H. Diffley, account number 1600070019531." Naples Federal Savings and Loan Association provided the May 31, 1988, statement of Respondent's aforementioned account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Professional Regulation, Florida Real Estate Commission, enter a Final Order which finds as follows: Respondent Michael H. Diffley guilty of fraud, violating the provisions of Subsection 475.25(1)(b), Florida Statutes, as alleged in Count I of the Administrative Complaint; Respondent Michael H. Diffley guilty of having failed to account and deliver funds, violating the provisions of Subsection 475.25(1)(d), Florida Statutes. Respondent Michael H. Diffley guilty of having failed to maintain funds in trust, violating the provisions of Subsection 475.25(1)(k), Florida Statutes; Respondent Michael H. Diffley guilty of violating the provisions of Rule 21V-14.012, Florida Administrative Code, for having failed to preserve and make available to the Department account records kept in accord with good accounting prac- tices, and therefore guilty of violating Subsection 475.25(1)(e), Florida Statutes; and Respondent Michael H. Diffley guilty of having violated Subsection 475.42(1)(h), Florida Statutes, by having failed to appear at the time and place required by subpoena, and therefore violated Subsection 475.25(1)(e), Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission revoke the Respondent's real estate license for the above- stated violations of Chapter 475, Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission impose an administrative fine in the amount of $1,000 for each of five (5) counts of the Administrative Complaint for a total administrative fine in the amount of $5,000 to be paid within thirty (30) days of the Final Order of the Florida Real Estate Commission. DONE AND ENTERED this 8th day of January, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 8th day of January, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Paragraphs 1 through 39- accepted in substance, except for paragraph 5 which is rejected as unnecessary and paragraph 31 which is in the nature of argument. Proposed Findings of Fact submitted by the Respondent: Paragraphs 1 and 2 - rejected as argumentative. COPIES FURNISHED: James H. Gillis, Esquire Senior Attorney Department of Professional Regulation Post Office Box 1900 Orlando, FL 32302 Kenneth M. Meer, Esquire 423 Country Club Drive Winter Park, FL 32789 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Kenneth E. Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
Findings Of Fact Petitioner is the state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, including Section 20.30, Florida Statutes, Chapters 120, 455 and 475, and the rules promulgated pursuant thereto. Respondent is a licensed real estate broker in the State of Florida having been issued license numbers 0487611 in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent was issued as t/a First Capital Realty & Investments, 3510 Biscayne Boulevard, Miami, Florida 33137. Hector F. Sehwerert, Petitioner's Investigator, conducted an office inspection and audit of Respondent's office and escrow accounts on or about November 19, 1990. The investigation disclosed that Respondent failed to maintain escrow reconciliation statements required by applicable law. Respondent commingled the escrow funds with his personal funds. On or about October 1, 1990, and November 3, 1990, Respondent received two earnest money deposits from purchasers of HUD properties in the respective amounts of $2,000.00 and $1,615.00. Respondent deposited the earnest money in the aggregate amount of $3,615.00 into his personal account number #012153441 maintained at Southeast Bank, N.A., which contained $11,926.49 in personal funds. Respondent has subsequently changed banks and has now opened an escrow account in accordance with applicable statutes and rules. Respondent failed to display the required office entrance sign on or about the entrance to his real estate office. The Respondent had moved his office some 30 days prior to the office inspection and the sign he had maintained at his previous office had not yet been moved. The sign had been moved and was displayed in front of Respondent's new office location at the time of the formal hearing.
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that a Final Order be issued and filed by the Florida Real Estate Commission finding the Respondent: Guilty of the allegations in the Administrative Complaint; Placing Respondent's real estate broker certifications, licenses, permits and registrations on probation for a period of one (1) year; and During such probationary period, requiring Respondent to provide copies of monthly escrow account statement/reconcilia- tions to: James H. Gillis, Senior Attorney, Division of Real Estate, Legal Section, 400 West Robinson Street, Orlando, Florida 32801-1772. Additional terms of the probationary period, including broker education, shall be determined by the Florida Real Estate Commission; provided that such probationary terms shall not require Respondent to retake any state licensure examination as a result of these proceedings or the resulting administrative action. In accord with Florida Administrative Code Rule 21V-24.001(2)(a), it is further recommended that, as a part of the probationary conditions, Respondent appear before the Commission at the last meeting of the Commission preceding termination of probation. DONE and ENTERED this 15th day of July, 1991, in Tallahassee, Leon County, 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 16th day of July, 1991.
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 The issues presented herein are whether or not the Respondent, Maria M. Drummond Mulgrave, failed to account and deliver monies received in a trust or escrow bank account monies received as a deposit for realty in a real estate transaction in violation of Subsections 475.25(1)(d), Florida Statutes, and by reason thereof, Respondent engaged in acts and/or conduct amounting to fraud, is representation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings. During times material herein, Respondent, Maria M. Drummond Mulgrave, was a licensed real estate salesperson and has been issued license number 0396817. Respondent's last issued license was as a salesperson and she worked through the entity, Welsh International Realty, Inc., 4684 NW 183 Street, Miami, Florida 33155. Respondent, in her capacity as a salesperson, on January 31, 1984, was the selling agent who executed a purchase, sales contract and receipt for deposit for purchasers Michael A. and Marjorie Bucknor for a residence situated at 240 NW 203 Terrace, Miami, Florida. The seller of that property was Equitable Relocation Management Corporation (Equitable). Equitable executed the sales contraction February 7, 1984. On January 31, 1984, Respondent Mulgrave received in trust a $1,000 earnest money deposit which was held in an escrow account by her broker, Welsh International Realty, Inc. In connection with the January 31, 1984 sales contract, the purchasers were to tender to the Respondent an additional $6,500 deposit within 5 days of acceptance by the seller or, in this case, on February 12, 1984, inasmuch as Equitable approved and executed the sales contract on February 7, 1984. (Petitioner's Exhibits 1 and 2) 3/ Petitioner has alleged that the listing agency, Associates Realty Company (Associates), requested from the Respondent on March 11 and March 19, 1984, an escrow letter verifying that the additional escrow deposits had, in fact, been made. It is also alleged that the Respondent verbally assured Associates that the entire deposit of $7,500 was in escrow and that the sale would close, but Respondent did not then provide Associates the promised escrow letter. It is also alleged that Associates relied upon Respondent's statements that the deposit was in escrow and that it was not until approximately April 17, 1984 that Respondent admitted to Associates Realty that only $1,000 was in escrow. (Petitioner's Exhibit 3) As stated, Respondent Oswald S. Welsh entered into a stipulated settlement and is no longer a Respondent in these proceedings. Sometime following the execution of the sales/deposit receipt contract by the Bucknors and the sellers, Equitable Relocation Management Corporation, by its agent Claire Smith, Respondent Mulgrave left the Miami area and gave the pending sales contracts to her sponsoring broker, Oswald S. Welsh. Marcia Mize was, during times material herein, the processing supervisor for the listing agency, Associates Realty. Once Ms. Mize began processing the Bucknor contract, she commenced making inquiries from Welsh International Realty, Inc. trying to get the needed verifications of income, etc. to the mortgage company such that the purchasers could be processed and a commitment letter issued. Ms. Mize made several oral requests of Welsh International Realty for verification of the escrow deposits from approximately February 7, 1984 through March 9, 1984. On March 17, 1984, Ms. Mize learned (from Respondent) that Welsh Realty only had $1,000 in escrow. Oswald S. Welsh, the broker for Welsh International Realty, Inc., by letter dated January 31, 1984, advised Associates Realty that Welsh was holding $1,000 in escrow from the Bucknors toward the purchase of the subject property. Marcia Mize was unsure if Respondent Mulgrave advised her that she had the additional $6,500 in deposits. Ms. Mize testified that she spoke with several secretaries employed by Welsh International Realty but she was unable to verify that she determined that it was Respondent Mulgrave who advised that the additional $6,500 deposit was in escrow with Welsh International Realty, Inc. Respondent Mulgrave later determined that the Bucknors were having marital and financial problems and, as a result, were unable to close on the transaction as agreed in the purchase/sales contract. Respondent Mulgrave denies that she, at any time, advised Marcia Mize of Associates Realty that she had the $6,500 which represented the balance of the remainder of the downpayment by the Bucknors in the purchase of the residence from Equitable. Respondent Mulgrave turned this transaction over to her sponsoring broker, Oswald S. Welsh when she had to leave the Miami area to attend to some pending family business. The Bucknors did not give Welsh International Realty, Inc. the remaining $6,500 escrow deposit which represented the remainder of their downpayment toward the purchase of the subject residence.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby recommended that the administrative complaint filed herein against Respondent, Maria M. Drummond Mulgrave, be DISMISSED. RECOMMENDED this 18th day of September, 1985, in Tallahassee, Florida. JAMES E. BRADWELL 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 18th day of September, 1985.
