Findings Of Fact At all times relevant hereto, respondent, Ezell Realty, Inc., was a licensed corporate real estate broker having been issued license number 0231943 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Winfield Ezell, Sr., held real estate broker's license number 0309739 issued by petitioner and was the sole qualifying broker and officer of Ezell Realty, Inc. The firm is located at 1512 West Gore Street, Orlando, Florida. Grover Crawford was an acquaintance of Ezell who was interested in purchasing certain rental property on Coretta Way in Orlando, Florida. When he was unable to purchase the property Crawford told Ezell to let him know if anything else became available in that area. Ezell happened to own a rental house at 1121 Coretta Way which he had just purchased several months earlier in a foreclosure proceeding, and the two eventually began discussions concerning a possible sale. At all times relevant thereto, the house was rented to tenants, and Crawford intended the property to remain as investor-owned property rather than owner-occupied property. Ezell initially agreed to sell the property for $70,000 and the two entered into a contract on January 8, 1983, using this sales price. However, the lender's appraisal of the residence came in far below this figure, and the parties eventually agreed on a sales price of $55,450. A second contract for sale and purchaser was executed on June 22, 1983. Although the contract provided that Crawford would pay a cash deposit of $2,300 to be held in escrow by Ezell Realty, none was paid since Ezell was given $2,300 by the tenants of the house to make needed repairs to the property prior to the sale. This arrangement was agreeable with Crawford. The contract also required the seller (Ezell) to pay all closing coats. Therefore, Crawford was not required to pay any "up front" costs in order to buy the property. Under the terms of the second contract, Crawford was to obtain FHA financing on the property in the amount of $53,150. This type of financing is the most desirable from an investor standpoint since the mortgage can be easily transferred to another buyer for a small transfer fee without lender approval. After executing the first contract on January 8, 1983, Ezell and Crawford executed an "Addendum to Contract For Sale and Purchase" on the same date which provided in pertinent part: This contract is for the sole purpose of having the buyer obtain an assumable FHA mortgage for the seller and reconveying title to the seller. The seller hereby irrevocably assumes the said FHA mortgage from the buyer immediately after closing and the buyers hereby agree to that assumption. For this, Crawford was to receive $1,000. The parties agreed that this addendum would apply to the second contract executed on June 22, 1983. At the suggestion of Ezell, Crawford made application for a $53.150 FHA loan with Residential Financial Corporation (RFC) in Maitland, Florida, a lending institution which Ezell had done business with on a number of prior occasions. However, Ezell was not present at any meetings between Crawford and RFC. When Crawford applied for the mortgage, he indicated the property would be used for investment purposes and would not be owner-occupied. For some reason, RFC assumed the property would be owner-occupied and structured the-loan in that manner. Because of this, Crawford's down payment was slightly less than 5% of the value of the property with the remainder being financed by the institution. Had RFC treated the loan as an investor-loan, the down payment would have been increased to around 15%. Neither Crawford or Ezell advised RFC of the Addendum to the contract which required Crawford to reconvey the property to Ezell for $1,000 once the FHA mortgage was obtained. Had RFC known of this it would not have approved the loan. There was no competent evidence that such an agreement was illegal or violated any federal laws or contravened any real estate industry standard or ethical consideration. The loan was eventually approved, and a closing held on September 22, 1983. After closing, Crawford retained the property in his name with Ezell making all payments from the rent proceeds. This was consistent with an oral agreement between the two that such an arrangement would last for an indefinite period as long as the payments were current. When Crawford later received several notices from the lender stating that mortgage payments were in arrears, he hired an attorney and demanded that Ezell fulfill the terms of the Addendum. He also filed a complaint against Ezell with petitioner which precipitated the instant proceeding. After the closing, Ezell had intended for the tenants to assume the mortgage since they had expressed an interest in buying the property. However, such a sale never materialized. In July, 1984, the property was reconveyed to Ezell, and Ezell paid Crawford $1,000 as required by the Addendum.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be dismissed, with prejudice. DONE and ORDERED this 7th day of August, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1985. COPIES FURNISHED: Arthur R. Shell, Jr., Esq. P. O. Box 1900 Orlando, FL 32802 Julius L. Williams, Esq. P. O. Box 2629 Orlando, FL 32802 ================================================================ =
The Issue Whether the Respondent's Florida real estate license should be disciplined based upon the charge that the Respondent is guilty of fraud, misrepresentation, 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 Petitioner is a state licensing and regulatory agency charged with the responsibility to Administrative Complaints pursuant to the laws of he State of Florida, in particular, Section 20.30, Florida Statues, Chapters 120, 455, and 475, Florida Statutes and the rules promulgated pursuant thereto. Respondent Doris Duke is now and was at all material hereto a licensed real estate salesman in the State of Florida having been issued license number 0441054 in accordance with Chapter 475, Florida Statutes. On June 13, 1989, the Respondent solicited and obtained a listing for the sale of an adult care center from seller Shirley Holland. The listing price was $300,000. (Petitioner's Exhibit 1). The property had been on the market for sometime and seller was anxious to sell. S. L. Patterson and Anne M. Reese had been interested for sometime. On January 19, 1990, the Respondent solicited and obtained an offer to purchase the adult care center from S. L. Patterson and Anne M. Reese, buyers, in the amount of $225.000. The contract was contingent upon financing. The Respondent presented the offer to the seller on or about January 20, 1990. Seller would have received approximately $25,000 and a second mortgage for $65,000. (Petitioner's Exhibit 2). Subsequently the buyers were unable to obtain financing, and the contract was void at this point. In an effort to consummate the sale, Respondent arranged financing for the buyers. The terms of this transaction as reflect in the closing documents, FREC 4, showed a sales price of $125,00, with a first mortgage of $100,000, a second mortgage of $46,250 and a third mortgage to seller of $84,500. However, this financing required an added $25,000 which came from the $25,000 originally to the seller. The Respondent advised the seller of the changes the day before the closing; however, the changes to the contract were not reflected in writing either in the contract or in an addendum. Instead the changes were reflected in the closing documents (FREC 4). Instead of receiving about $2,000 the seller had to pay $68.08 at closing. The Respondent and Respondent's employer Century 21 Harris Real Estate & Associates, Inc. profited in the amount of a $22,500 commission, an amount which they earned under the listing contract. Subsequently, the purchasers, who were black and operated an adult congregate living facility, were the targets of racially motivated vandalism and hate crimes. As result they were unable to make a financial success on the venture. The buyers defaulted on their mortgage payments, and foreclosure was initiated by one of the principal mortgagees.
Recommendation RECOMMENDED that charges against the Respondent be dismissed. DONE AND ENTERED this 30th day of October, 1991, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer 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 30th day of October, 1991. APPENDIX CASE NO. 91-4554 The Petitioner's Proposed Recommended Order was read and considered. The following is a list of the findings which were adopted and which were rejected and why. Paragraphs 1, 2, 4, 5, 7, 8, 9, 10, 11, 12 and 13 were adopted. Paragraph 3 was rejected as irrelevant. Paragraph 6 was rejected as irrelevant and contrary to the best and most credible evidence. COPIES FURNISHED: Steven W. Johnson, Esquire Senior Attorney Florida Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Doris Duke 6676 Cedar Point Road Jacksonville, Florida 32226 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact During 1982 and 1983, Petitioner was licensed as a mortgage broker and real estate broker in the State of Florida. His mortgage broker's license expired in September, 1983. At all times material hereto, Petitioner utilized his mortgage broker's and real estate broker's license to engage in real estate development speculation. He worked closely with Jeffrey Graham, who was also licensed as a mortgage broker and who was a co-owner with Petitioner of Continental Development, Continental Mortgage Company and the Real Estate Spot. They were engaged in buying and selling existing residential properties and constructing new homes for sale. Financing for Petitioner's speculative real estate transactions was provided primarily by The Bank of Florida, located in St. Petersburg, Florida. The Bank provided financing on 80 to 85 percent of his transactions, but at some point in 1982 or 1983, Petitioner and Graham found themselves unable to obtain further construction financing from the Bank. In order to continue receiving financing from the Bank, Petitioner and Graham initiated the use of "stand-in" buyers. A "stand-in" buyer would not have to use any of his own money as a deposit or down payment, even though real estate contracts executed in connection with these transactions would show an earnest money deposit by such buyers. The buyer's role was simply to lend his credit to the transaction and to share in any profits on the eventual sale of the property. On or about March 25, 1983, Petitioner executed, as seller, a contract for sale of real estate and deposit receipt with Norman Tanner, buyer. The transaction involved the sale of real estate in Pinellas County, Florida, and reflects a total purchase price of $25,000, with an earnest money deposit of $5,000 which the contract specified was to be held by Petitioner, as seller, until closing. Petitioner also executed a Settlement Statement on March 29, 1983, in connection with a loan obtained by Tanner from The Bank of Florida which indicated that Tanner had paid an earnest money deposit of $5,000. Based upon the testimony of Norman Tanner at hearing, it is found that he did not provide the earnest money deposit indicated on the sales contract or Settlement Statement which Petitioner executed as seller. Petitioner testified that this transaction was carried out in his individual capacity as a personal investment, and not under the authority of his mortgage broker's license. In fact, Petitioner did not deal directly with Tanner in this transaction. Tanner's dealings were with Petitioner's partner, Jeffrey Graham. Nevertheless, the evidence and demeanor of the witnesses establishes that Petitioner was aware of the fact that Tanner had not paid the deposit reflected on the instruments he executed, and that such instruments were used to induce the Bank to make a mortgage loan to Tanner. Petitioner, as seller, received $19,665.56 cash at settlement from this transaction with Tanner. On or about February 24, 1982, Petitioner executed a contract for sale of real estate and deposit receipt with Joseph Armendinger, buyer. The transaction involved the sale of real estate in Pinellas County, Florida, and reflects a total purchase price of $48,000, with an earnest money deposit of $6,500 which the contract specified was to be held in escrow by The Real Estate Spot, Inc., until closing. Petitioner and Armendinger also executed an Affidavit of Purchaser and Vendor in connection with obtaining financing for this transaction, and said Affidavit also indicated the buyer's purported cash equity of $6,500 in the property. At the time, Petitioner was co-owner of The Real Estate Spot, and Armendinger was an electrician who was doing some work at The Real Estate Spot and became interested in the "stand-in" buyer transactions he observed while doing electrical work at Petitioner's office. On or about October 27, 1982, Petitioner and Armendinger executed another contract for sale and deposit receipt for a second piece of property, which reflects a total price of $85,000 and an earnest money deposit by Armendinger of $5,000. Thereafter, they executed an Affidavit of Purchaser and Vendor and Settlement Statement reflecting Armendinger's purported cash equity of $4,250.00. Petitioner used the proceeds from this transaction to pay off an existing mortgage and judgment on the property, and realized $1,607.46 in cash, which was shared with Jeffrey Graham, co-seller. Petitioner knew that the contracts for sale and Affidavits which he executed with Armendinger were to be presented to The Bank of Florida and used for the purpose of Armendinger obtaining financing for the purchase of these properties. Based upon the testimony of Joseph Armendinger at hearing, it is found he did not provide any earnest money deposit or downpayment in connection with these two transactions with Petitioner. Armendinger relied on Petitioner, a licensed mortgage broker and real estate broker, in these transactions, and was told by Petitioner that he would not have to put any money of his own into these transactions. Petitioner knew that Armendinger had not made any deposit or downpayments concerning these transactions at the time he executed the contracts for sale and deposit receipts, Affidavits and Settlement Statement. On December 16, 1982, Petitioner executed two mortgages in favor of Patricia G. Herren on property he had previously sold to Armendinger. These mortgages totalled $21,793.35, and were recorded in Pinellas County, Florida, on December 28, 1982. These mortgages were used by Petitioner, along with a $10,000 mortgage he executed in Herren's favor, to obtain a satisfaction from Herren of a mortgage she held on a piece of property she sold to Petitioner in October 1982 in St. Petersburg Beach. The $10,000 Herren mortgage was also recorded on December 28, 1982. Having obtained the satisfaction, Petitioner then sold the St. Petersburg Beach property to Juanita Murdaugh and Jeffrey Graham on December 17, 1982, prior to recording the $10,000 Herren mortgage. He did not disclose on the Affidavit of Purchaser and Vendor which he executed that he had an outstanding $10,000 mortgage in favor of Herren on this St. Petersburg Beach property, although this mortgage should have been disclosed as "secondary financing." In each of the Affidavits of Vendor and Purchaser executed by Petitioner in connection with sales of property as described herein, there is the following statement in Item VII: The certifications of this affidavit are for the purpose of inducing the Lender named above or its assignees to make or purchase the first mortgage described by this affidavit.... By signing the Affidavits of Vendor and Purchaser, Petitioner, as the "Property Vendor," made the following certification: The PROPERTY VENDOR hereby certifies that to the extent PROPERTY VENDOR is a party, the Financial Terms, including Total Purchase Price, and the Liens are as set forth in Items III and IV above, [and] hereby acknowledges the inducement purpose of this affidavit as set forth in Item VII above....
Recommendation Based upon the foregoing, it is recommended that Petitioner's application for licensure as a mortgage broker be DENIED. DONE AND ENTERED this 19th of October, 1987, in Tallahassee, Florida. DONALD D. CONN 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 19th day of October, 1987. APPENDIX (DOAH No. 87-0033) Rulings on Petitioner's Proposed Findings of Fact: 1. Adopted in Finding of Fact 1. 1.(a) Adopted in Findings of Fact 2, 4. 2.(a) Rejected as not based on competent substantial evidence. 2.(b) Rejected in Findings of Fact 5, 6. 2.(c) Rejected in Finding of Fact 10. 2.(d) Rejected in Findings of Fact 6-10. 2.(e), (f) Rejected in Finding of Fact 11. Rulings on Respondent's Proposed Findings of Fact: 1. Adopted in Finding of Fact 1. 2. Adopted in Findings of Fact 2, 3. 3. Adopted in Finding of Fact 2. 4. Adopted in Findings of Fact 3, 4. 5-6. Rejected as not based upon competent substantial evidence. 7. Adopted in Finding of Fact 5. 8. Adopted in Findings of Fact 5, 6. 9. Adopted in Findings of Fact 7, 10. 10-11. Adopted in Findings of Fact 7, 9, 10. Adopted in Findings of Fact 8, 10. Adopted in Findings of Fact 8, 9, 10. 14-19. Adopted in Finding of Fact 11. Adopted in Finding of Fact 12. Adopted in Finding of Fact 13. Rejected as not based on competent substantial evidence. Adopted in Finding of Fact 11. Rejected as unnecessary and cumulative. COPIES FURNISHED: John Swisher, Esquire Dillinger & Swisher 5511 Central Avenue St. Petersburg, FL 33710 Stephen M. Christian, Esquire Office of Comptroller 1313 Tampa Street Tampa, FL 33602-3394 Honorable Gerald Lewis Department of Banking and Finance Comptroller, State of Florida The Capitol Tallahassee, FL 32399-0350 Charles L. Stutts General Counsel Plaza Level The Capitol Tallahassee, FL 32399-0350
The Issue The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), and (e), Florida Statutes, 1/ through culpable negligence or breach of trust in a business transaction; by failing to account or deliver trust funds; and by failing to timely notify the Florida Real Estate Commission of a deposit dispute or to implement remedial action; and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0037920. The last license issued to Respondent was issued as a broker at Heath Realty, 4864 S. Orange Avenue, Orlando, Florida. On May 18, 1993, Mr. Anthony Rodgers and Ms. Jill Rodgers (the "buyers") entered into a contract to purchase real property from Ms. Norma A. Cash (the "seller"). The buyers entrusted Respondent with a total earnest money deposit of $1,000. The transaction failed to close. On July 8, 1993, Respondent timely notified Petitioner in writing that there were conflicting demands for the earnest money deposit and a good faith doubt regarding the deposit. However, Respondent failed to institute one of the settlement procedures described in Section 475.25(1)(d)1. until legal proceedings between the buyer and seller were amicably settled approximately seven months later. Respondent failed to institute a prescribed settlement procedure in a timely manner even though Petitioner advised Respondent in letters dated July 26, 1993, and September 9, 1993, of the action Respondent should take. On February 9, 1994, Respondent finally requested an escrow disbursement order in accordance with Section 475.25(10(d)1. The escrow deposit was paid to the seller pursuant to the agreement of the parties.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Sections 475.25(1)(b), 475.25(1)(d)1., but guilty of violating Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032. It is further recommended that the Final Order place Respondent on probation for a period of one year and, during the period of probation, require Respondent to complete courses in broker management not to exceed eight credit hours. RECOMMENDED this 8th day of February, 1995, in Tallahassee, Florida. DANIEL S. 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 8th day of February 1995.
Findings Of Fact At all times relevant hereto, respondent, Robert A. Sempell, was a licensed real estate broker having been issued license number 02178232 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). Respondent, Virginia Bloise, was also a licensed real estate broker having been issued license number 0376974. Respondent, Home Shoppe, Inc., is a corporation registered as a broker having been issued license number 0229887. When the events herein occurred, the firm was located at 2610 North Federal Highway, Boynton Beach, Florida. Sempell operated as qualifying broker for Home Shoppe, Inc., from November 14, 1983, until October 12, 1984, Bloise was a salesperson with the same firm from July 9, 1984, until October 18, 1984, when she assumed the position of broker of record. Ilana Frank was the firm's only licensed salesperson, and she worked for the firm from 1983 until around January, 1986. In February, 1984, Frank represented Morgan King, an individual interested in purchasing a home located at 502 Northeast Second Street, Delray Beach, Florida. The property was listed with Douglas Rill and Associates, Inc., a West Palm Beach real estate firm. The home was owned by Joseph Michell, a Pratt-Whitney employee being transferred to Texas, and he had turned it over to TransAmerica Relocation Service, Inc. (TransAmerica), a firm that handled real estate sales for Pratt-Whitney employees who were relocating to other areas of the country. Deciding to purchase the property, King executed a standard contract on February 20, 1984 to purchase the home for $125,000. The contract contained a clause providing that the purchase was contingent on King obtaining a Veterans Administration (VA) loan in the amount of $122,250 at a 12 1/2 percent interest rate. 3/ A closing date of May 20, 1984, was established by the parties. The contract provided further that King would make a $1,200 cash deposit and that, pursuant to an addendum executed on February 22, he could rent the house until closing at a rate of $628 per month. Finally, the contract required that King give an extra $3800 to be deposited in escrow before moving into house, and within 45 days after the contract was executed, to 'submits' an additional $3,000. The addendum provided, however, that the $8,000 was "nonrefundable." After King signed the original contract, he gave Frank a $1,200 deposit. Frank, who was not a signatory on the firm's escrow account, carried the money to Sempell who placed his signature on the contract as an acknowledgment of receipt of deposit. Whether the money was deposited into the firm's escrow account is not of record. In any event, King did not have the extra $3800 needed to satisfy the initial deposit requirements of the contract. To ensure that a closing could be held, Frank approached Alan D. Mentser, a real estate salesman with another firm, Bob Railey's Realty, Inc., and asked if he would loan King the money until the anticipated closing on March 30, 1984. 4/ Mentser agreed to do so with the understanding that the $3800 would be placed immediately in an escrow account until closing. When he loaned the money, Mentser was under the impression that the money would be held in the escrow account of Douglas Rill, the listing broker. Because Mentser did not feel comfortable loaning the money to King, a person who he did not know, he required Frank to sign a promissory note on February 24, 1984 in the amount of $3800. At the same time, King signed an identical promissory note for $3800 payable to Frank. In addition, Frank orally agreed with Mentser that, for the use of his $3800 until March 30, 1984, she would pay him $1200 interest, or a handsome thirty percent return on his money. The $1200 was to be taken out of Frank's portion of the broker commission split. However, Mentser recognized that he was not a participating broker or salesman in the transaction and had no formal claim to the escrowed money in a realtor capacity. Indeed, the loan to Frank was personal in nature, and although Mentser intended it to be used as a part of the deposit, it was not considered a part of the real estate transaction. On February 24, Mentser gave Frank $3800 in cash which she promptly gave to Bloise the same day. Bloise was a signatory on the firm's trust account and had authority to make deposits and disbursements. After Bloise prepared a deposit receipt, Frank used $300 of the $3800 to purchase renter's insurance for King and deposited the remaining $3500 in Home Shoppe, Inc.'s escrow account at the Bank of South Palm Beaches in Lantana. The $300 deduction was made pursuant to an agreement by all parties. After King took possession of the property, he failed to qualify for a VA loan. Sometime later, he moved out of the house with no notice to the realtors or seller and gave no forwarding address. His whereabouts are unknown. TransAmerica later instituted eviction proceedings in order to legally take possession of the property. A final judgment of eviction was obtained on July 6, 1984. By now March 30, 1984, had come and gone and Mentser was eager to get his money. He initially contacted Frank but learned something had gone awry with the contract. When his informal requests to Frank were unsuccessful, Mentser engaged the services of an attorney who wrote a certified letter on May 4 to Sempell demanding a refund of his money from the firm's escrow account. After the letter was returned three times, the attorney had the letter hand- delivered to the firm's address where Frank signed for it. There is no evidence that Sempell was given the letter. After Mentser contacted Frank about his money, Frank spoke to Bloise on several occasions concerning Mentser's inquiry. The dates of these conversations are not of record. In any event, Bloise told her that a "dispute" had arisen over the escrow deposit and until it was resolved by the Division, Mentser could not get his money. This was not true since Bloise never turned the matter over to the Division for resolution. On July 12, 1984, the seller made a formal claim for the full deposit on the ground King had breached the contract and forfeited the deposit. Although there is no specific evidence as to the disposition of the claim, it may be reasonably inferred that TransAmerica's claim has not been honored. On August 6, 1984, Mentser obtained a default judgment against Frank in circuit court and was awarded $3800 in damages, prejudgment interest of $160, attorney fees of $300, and fees and costs of $50, or a total of $4310. He wisely did not request that he also be awarded the $1200 interest for the use of his money. The judgment has never been satisfied. Sempell went "out of the country" sometime in 1984 and was absent for much of the year. There is no evidence he received any demands for Mentser's money before he resigned as broker of record nor is there evidence that he was a signatory on Home Shoppe, Inc.'s escrow account. Indeed, the president of the bank in which the firm's escrow account was placed knew only that Bloise was a signatory on the account. Further, copies of cancelled checks written on the account and introduced into evidence reflected only Bloise's signature. The allegation that in October, 1984, Sempell absconded with certain funds from the firm's escrow account was not addressed at hearing and has been disregarded. Partial bank records of the firm's escrow account reflect that the $3500 was properly deposited into the account on February 27, 1984. As of December 28, 1984, the balance in the account had dropped to $1,688.98, which meant at least a part of the deposit had been spent for other purposes. Whether these expenditures occurred before or after Sempell resigned as broker of record is unclear. In any event, Bloise acknowledged to a Division investigator in May, 1987, that she had written a number of checks on the account for her own use. She justified this action by explaining that Frank had told her that the $3800 was their "own" money and could be spent "to run the business." Bloise also confirmed that, when this controversy arose, she was the only signatory on the firm's account and that Sempell had no authority to write checks or make disbursements.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondents be found guilty of violating Subsections 475.25(1)(b), (d) and (k), Florida Statutes (1983), and that the broker licenses of Bloise and Home Shoppe, Inc. be suspended for five years. Sempell's broker license should be suspended for one year. DONE AND ORDERED this 20th day of July, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 20th day of July, 1988.
Findings Of Fact Based upon 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: Phyllis I. Reaves is now and was at all times material to these proceedings, a licensed real estate salesman in the State of Florida having been issued license number 0351816. Annette J. Ruffin is now and was at all times material to these proceedings, a licensed real estate broker having been issued license number 0076385. From May 2, 1983 to October 18, 1984, Respondent Phyllis I. Reaves was licensed and operating as a real estate salesman in the employ of Respondent Annette J. Ruffin, as broker, c/o International Investment Development Center, Belleair, Florida or Century 21 A Little Bit Country, Brandon, Florida. At all time material hereto, Respondent Phyllis I. Reaves was a licensed mortgage broker in the State of Florida. DOAH CASE NO. 85-1008/1138. COUNT I No evidence was presented concerning the allegations in Count I.. COUNT II No evidence was presented concerning the factual allegations of Count II. COUNT III No evidence was presented concerning the allegations of Count III. COUNT IV On June 10, 1983, Respondent Reaves entered into a real estate sales contract with Emmett K. Singleton, as seller to purchase certain real estate through the use of a land trust. The sales contract listed a total purchase price of $67,000. C-21 A Little Bit Country was listed on the contract as escrow agent of the binder deposit. The property had an existing first mortgage of approximately $33,854. Respondent Reaves agreed to assume the new mortgage and requested that Mr. Singleton obtain a second mortgage in the principal amount of $26,400. Reaves agreed to assume this second mortgage amount while allowing Mr. Singleton to keep the proceeds. Mr. Singleton agreed that the balance of the sales price would be paid via a purchase money mortgage to Respondent Reaves in the principal amount of $9,643.99. Respondent Phyllis I. Reaves executed a Hold Harmless and Indemnity Agreement which read as follows: "Phyllis Reaves does agree to hold Emmett K. Singleton harmless and does idemnify him against any future liability or losses related to the mortgage on subject property at 1912 Hastings Drive, Clearwater, Florida." The sales transaction closed on July 7, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,955. The contract provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The purchase money mortgage note was actually signed by Michael R. Fisher, as trustee, and not by Respondent Reaves. Respondent Reaves requested that Mr. Singleton give her the mortgage payment booklets and she would assume and pay off the existing and second mortgages. Singleton trusted Reaves and relied upon her statements that she would do as she promised. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. After closing, Respondent Reaves, acting as the owner, obtained tenants for the property and collected rental payments. Respondent Reaves solicited and obtained $3,000 in connection with a lease/option agreement. The lease/option agreement provided that the sales price of the home would be $78,000 in three years. The rent would remain at $495 per month for three (3) years. The agreement further provided that $3,000 per year would be paid for three (3) years which would reflect a total down payment of $9,000. This down payment was considered the "option consideration." The agreement provided that one third of the option money would be returned if the option were not exercised. The tenants paid Respondent Reaves a total of $3,000 of the option consideration. The renters became concerned when they began to receive notices from Freedom Mortgage Company stating that certain mortgages on the home were overdue. The renters did not exercise the option to buy the home. The renter requested, but did not receive, $1,000 of the $3,000 option consideration back from Respondent Reaves. COUNT V On July 6, 1983, Respondent Reaves entered into a real estate sales contract with Stephen B. Barnes, as seller, to purchase certain real estate through the use of a land trust. The property was not listed", but a broker from Tam-Bay Realty approached Barnes and stated that he had a buyer. The purchase and sale agreement provided for a total purchase price of $91,000. The agreement listed "C-21 A Little Bit Country" as escrow-agent for the binder deposit. In addition, the purchase and sales agreement provided that: "Listing agent Tam-Bay agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The seller agreed that he would allow Respondent Reaves to assume the existing mortgage of approximately $52,990. Mr. Barnes then agreed to obtain a second mortgage in the amount of $18,925. The seller agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $16,670.91 to be paid by Respondent Reaves. In addition, Mr. Barnes obtained a home improvement loan in the amount of $4,900. According to the agreements between Respondent Reaves and Mr. Barnes, Mr. Barnes was to keep the money obtained by the second mortgage and the home improvement loan. Respondent Reaves agreed to assume the existing mortgage, the second mortgage and the home improvement loan. Respondent Reaves advised Mr. Barnes to state to the lender that the purpose of the loans were for home improvements. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Stephen. B. Barnes harmless and does indemnify him against any future liability or losses related to the mortgages on property at 13222 - 88 Place North, Seminole, Florida." The sales transaction closed on August 10, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $2,513.45 and a mortgage brokerage fee of $946.25. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. COUNT VI On September 3, 1983 Respondent Reaves entered into a real estate sales contract with Floyd and Christine Erwin, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned Floyd and Christine Erwins' home located at 2805 Candlewood Drive in Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $53,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves agreed to assume the existing mortgages of $16,766.29 and $17,457.94. In addition, the sellers agreed to obtain a new mortgage in the principal amount of $4,900 and a $1,500 personal loan. Upon the advice of Respondent Reaves, the sellers stated to the lender that the purpose of the loans were for home improvements. Respondent Reaves and the sellers agreed that the sellers would keep the money obtained by the loans and that Respondent Reaves would assume the mortgages and make all of the required loan payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage, payable by Respondent Reaves, in the principal amount of $12,375.77. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Floyd S. Erwin and Christine E. Erwin harmless and does indemnify them against any future liability or losses related to mortgages or liens on the subject property at 2805 Candlewood Drive, Clearwater, Florida." Floyd and Christine Erwin's home was listed with a broker, and the Erwins understood that Reaves was not their agent. Respondent Reaves told the Erwins that she was representing "some investors." The purchase money mortgage note was actually signed by "Michael R. Fisher, as trustee and not personally." Respondent Reaves made some payments on the purchase money mortgage note which was signed by Michael Fisher. The sales transaction closed on September 23, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,555.50. Respondent Reaves failed to assume and pay the mortgages and notes. Respondent Reaves has not made the payments due on the mortgages and notes and has caused the Erwins to become delinquent with their lenders. COUNT VII The evidence presented concerning Count VII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section, infra, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT VIII On October 16, 1983, Respondent Reaves entered into a real estate sales contract with Patricia and William Willis as sellers, to purchase certain real estate through the use of land trust. The contract concerned the Willis' home located at 417 North Missouri Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $54,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the Willis' agreed that Respondent would assume the existing mortgage of $15,396.52. The sellers agreed to obtain the new mortgage in the principal amount of $34,100. The sellers agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $8,898.45 to be paid by Respondent Reaves. Respondent Reaves agreed to assume the existing mortgage and the new mortgage in the amount of $34,100 and make all of the required loan payments. Respondent Reaves advised the Willis' to state to the lender that the purpose of the $34,100 mortgage loan was for home improvements. The Willis' applied for the loan but refused to state that the purpose of the loan was for home improvements. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Patricia L. Carrah, a/k/a Patricia L. Willis and William Willis harmless and does idemnify them against any future liability for losses related to any mortgages or liens on the subject property " The sales transaction closed on November 23, 1983 and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $3,213 and a mortgage brokerage fee of $2,216. Respondent Reaves failed to assume the notes and mortgages and thereby caused the sellers to become delinquent with their lenders. COUNT IX No evidence was presented concerning the allegations of Count IX. COUNT X No evidence was presented concerning the allegations of Count X. COUNT XI No evidence was presented concerning the factual allegations of Count XI. COUNT XII No evidence was presented concerning the factual allegations of Count XII. COUNT XIII No evidence was presented concerning the factual allegations of Count XIII. No evidence was presented concerning the factual allegations of Count XIV. COUNT XV on January 13, 1984, Respondent Reaves entered into a real estate sales contract with Clifford and Virginia Miner, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned the Miner's home located at 1247 Burma Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $62,000. The agreement listed "C-21 A Little Bit Country" as escrow agent for the binder deposit. In addition, the agreement provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the sellers agreed that Respondent Reaves would assume the existing mortgage of $34,424.82. Respondent Reaves advised the sellers to obtain a $20,000 second mortgage that she would also assume. The sellers were to obtain the mortgage and keep the money as their equity, and Respondent Reaves was to assume the mortgage and make the payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage in the principal amount of $6,865.33, payable by Respondent Reaves. Respondent Reaves promised the sellers that she would make all the required loan payments and assume the mortgages. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Clifford S. Miner and Virginia N. Miner, his wife, harmless and does idemnify them against any future liability or losses related to any mortgages or liens on the subject property . . . ." The purchase money mortgage note was actually signed by Michael R. Fisher, "as trustee and not personally." Respondent Reaves told Mr. Miner that the hold harmless agreement provided additional assurance that she would personally assume all of the mortgage and loans. The sales transaction closed on January 31, 1984, and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $1,823.25 and a mortgage brokerage fee of $949.48. Respondent Reaves failed to assume and pay the notes and caused the Miners to become delinquent with their lenders, requiring them to "catch up" on the delinquent loan. COUNTS XVI, XVII AND XVIII. The evidence presented concerning Count XVI, XVII and XVIII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section of this Recommended Order, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT XIX During the later part of 1984, an investigator, representing the Department of Professional Regulation, went to speak to Mrs. Ruffin at her "Little Bit of Country" office concerning this case. The investigator requested that he be provided with the records from all of Respondent Reaves' transactions. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was in the process of moving the location of her office. After subpoena was served, Respondent's counsel provided one of the documents in question. COUNT XX Respondent Ruffin employed Respondent Reaves as a salesman. Respondent Ruffin thought of Respondent Reaves as "an independent contractor." Respondent Reaves decided on her own hours and took care of her own transportation. Respondent Ruffin and Respondent Reaves were on an 85%-15% split fee arrangement. Respondent Ruffin knew that Reaves was interested in "buying a lot of property." Respondent Ruffin was basically aware of the method that Respondent Reaves was using to obtain property. Respondent Ruffin did not feel that the method was wrong, however, she did ask Respondent Reaves to leave employment after she received many calls complaining about Respondent Reaves and information that Respondent was in a "tight financial situation." Respondent Ruffin admitted that she had very little time to provide assistance or guidance to Respondent Reaves. DOAH CASE NO. 85-2454 COUNT I There was no evidence presented concerning the factual allegations of Count I. COUNT II There was no evidence concerning the factual allegations of Count II. COUNT III On October 2, 1984, an investigator, representing the Department of Professional Regulation, went to speak with Respondent Ruffin at her office. The investigator requested certain records relating to Respondent Reaves' transactions concerning the charges herein. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was then in the process of moving her office. After a subpoena was served, Respondent Ruffin's attorney provided one of the documents in question. COUNT IV There was no evidence presented concerning the factual allegations of Count IV of DOAH Case No. 85-2454.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that Respondent Phyllis I. Reaves' license as a real estate salesman be revoked; and, RECOMMENDED that Respondent Annette J. Ruffin be issued a written reprimand and assessed an administrative fine of $500.00. DONE and ORDERED this 27th day of March, 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 27th day of March, 1986. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 1. Adopted in Findings of Fact 2 and 3. Adopted in Findings of Fact 8 and 11. Adopted in Finding of Fact 10. Adopted in Finding of Fact 10. Adopted in Finding of Fact 12. Adopted in Findings of Fact 15 and 16. Partially adopted in Finding of Fact 17. Matters not included therein are rejected as subordinate and/or unnecessary. Adopted in Finding of Fact 18. Adopted in Finding of Fact 20. Adopted in Findings of Fact 20 and 21. Adopted in Finding of Fact 23. Adopted in Finding of Fact 24. Adopted in Finding of Fact 26. Adopted in Findings of Fact 26 and 27. Adopted in Findings of Fact 31 and 32. Adopted in Finding of Fact 34. Adopted in Findings of Fact 37 and 38. Adopted in Findings of Fact 36 and 38. Adopted in Finding of Fact 40. Adopted in Finding of Fact 47. Adopted in Finding of Fact 49. Adopted in Findings of Fact 49 and 50. Adopted in Finding of Fact 55. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Adopted in Finding of Fact 57. Adopted in Finding of Fact 58. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Gerald Nelson, Esquire 4950 West Kennedy Boulevard Tampa, Florida 33809 E. A. Goodale, Esquire 14320 Indian Rocks Road Largo, Florida 33540 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact Respondent Theodore Dorwin is a registered real estate broker, registration certificate number 0022474, 561 N.E. 79th Street, Miami, Florida. He also is now and was at all times alleged in the Administrative Complain the president and active firm member of Respondent Intermart, Inc., a registered corporate broker located at the same address. As broker with Intermart, Respondent holds registration certificate number . 0157090. Intermart is registered under certificate number 0157081. The registrations of both Dorwin and Intermart were suspended by Petitioner on July 21, 1976, for a period of ninety (90) days. By order, dated December 16, 1976, Petitioner denied Respondents' petition for reactivation and return of registration certificates. (Petitioner's Composite Exhibit 1) Intermart, Inc. was formed in the middle of 1975, but did not commence active operations until February, 1976. Prior to 1975, Dorwin had been a general real estate broker for various land companies in Florida. In 1975, he became associated for a brief period of time with a firm called Property Resales Service, Inc., of Miami, an organization that solicited listings for the resale of property. During the period February, 1975, until 1976, Dorwin was connected successively with International Land Brokers, Inc. (hereinafter "International") and Florida Landowners Service Bureau (hereinafter "Service Bureau"), both of which firms engaged in the solicitation of advance fees from out of state property owners for listing agreements whereby they undertook to advertise and sell the property for a ten percent commission. The listing agreements of these firms provided that the advance fee would be credited against the commission. In February, 1976, Intermart, Inc. was activated and began operations at the same office and with the same salesmen who had been used by Dorwin in his activities for the Service Bureau. It used virtually the identical "Listing and Brokerage Agreement" and promotional material as had the other firms. The change was brought about by the fact that commission checks received from the Service Bureau had "bounced." (Testimony of Dorwin, Petitioner's Exhibits 2,5,6,7,23,26,27,28) Respondents operated the advance fee business in the following manner: Lists of primarily out of state owners of land in large developments in Florida and other states were purchased by Respondents from individuals who sold such lists "on the street." In like manner, lists of prospective purchasers of such land were purchased. Information was placed on cards containing the name, address and phone number of the landowner, together with information as to the development where the land was located. A staff of some fifteen to twenty real estate salesmen were utilized to solicit listings from the prospective sellers over the telephone. Each salesman had a cubicle in a small office with a .telephone. These individuals worked in two shifts, six days a week, during the evening hours. Each salesman averaged about twenty to twenty-five telephone calls a night. When Intermart succeeded Dorwin's operation for the Service Bureau, there was little or no change in any of the above procedures. The average, listing fee was $350 , of which the soliciting salesmen received approximately one-third. The salesmen were provided a "script" or "opening statement" by Dorwin to use as a selling "pitch." The persons called were asked if they were interested in reselling their property. They were told that foreign investors around the world were interested in buying blocks of land in Florida and were quoted a sale price that usually was somewhat in excess of the current market value of the property. If the property owner expressed interest in listing his land for sale, literature was mailed to him which consisted of information about Intermart and the experience and qualifications of its officers, together with a form "Listing and Brokerage Agreement," and reprints of newspaper and other articles concerning the interest of foreign investors in land in the United States, and similar subjects. About two weeks later, the salesman would call the individual again to urge that he send in his advance fee, along with the signed listing agreement. The proposed selling price was fixed by the salesman from a large chart in the office that showed sample original purchase prices and amounts to be quoted as selling prices based on the number of years since purchase of the property. These amounts were used in all cases, regardless of where the property was located. The only deviation from the standard selling price was in cases where water or canal front property, golf course or business property was involved, in which case, $500 to $1,000 was added to the quoted figure. During the initial call, the salesman asked for the legal description of the lots in question and, if a listing was obtained, a copy of the agreement for deed or warranty deed was also requested. However, no efforts were made to check the legal descriptions of the property nor were any visits made to the property by Dorwin or other personnel of the firm. The sales man had nothing to do with actual sales of the property and did not contact prospective purchasers. Neither Dorwin nor one of his former salesmen who testified at the hearing was aware of any actual sales of listed property made by Intermart or the Service Bureau. No credible evidence was submitted that the property was ever checked for zoning restrictions or that prospective purchasers were contacted by anyone. Respondents did occasionally send a form letter to those listing property stating that Intermart "had the opportunity to present your property" to a named individual and that they would "endeavor to interest the prospect further." However nothing ever came of these supposed contacts. During the telephone conversations with sellers, the alesmen made statements to the effect that Intermart was making sales, and that the land would usually be sold within eight to nine months. In one case, a seller was told by one of Respondents' salesmen that Intermart had sold all of the property that had been listed with it. Further representations were that Argentine buyers loaded with money" wanted to invest in American real estate. One salesman represented that Respondents advertised all over the world in all foreign countries and in every state in the Union. A letter enclosed with promotional materials stated that Respondents advertised or had proposed advertising pending in a number of countries via major magazine and newspaper publications, and in Miami, Los Angeles, New York City, Boston and Chicago. Another landowner was told that the company had been in business for a period of ten years. It was also represented that Intermart had a computer printout on the latest market values of land and that this was used in determining their estimate of a selling price. In one instance, the salesman told the seller that they had identified a buyer for his land which would be part of a large block package to be sold to the individual and that a rapid decision had to be made whether or not to list. the property so that he could participate in the deal. He was further told that it would take about three months to close the sale with a Venezuelan investor. Attempts by the property owners to obtain copies of the listing agreement signed by Respondent proved to be futile, in spite of promises from its representatives to provide the same. In one instance, to induce a listing, the sales man told the landowner to cross out the amount shown on the listing contract that previously had stated a sale price and to pencil in an increased sales price. He also told him to make pencil corrections on the proposed agreement to indicate that the purchaser rather than the seller would pay the ten percent commission of the sales price. (Testimony of Judkins, Ladabauche, Nicholas, Burke, Petitioner's Composite Exhibit 2, Petitioner's Exhibits 5,6,7 [depositions]) Respondents' promotional literature and information that was sent to prospective sellers of property contained various promises and representations that were not kept, as follows: Respondents stated that it would "analyze" the property to arrive at a correct selling price by reviewing the status of development and zoning in the immediate area of the property. In fact, the selling price was based solely on an arbitrary figure selected from a chart on the wall that did not take into consideration the precise location of the property or zoning considerations. Respondents stated that "Your property legals are checked thoroughly." In fact, any legal description of the property was obtained solely from copies of agreements for deed or warranty deeds supplied by the owner , and were not further checked in any manner. Respondents stated "In order for us to successfully merchandise and receive the highest offer for your property (ies) considerable expense is involved because a great deal of time is put forth on your behalf and many of the property(ies) are being offered for sale sight unseen." In fact, only a small amount of money and little or no time was expended to sell the property. After the property owner had submitted his advance fee and listing agreement to Respondents, no further efforts were made on his be half nor was he ever contacted thereafter by the firm. (Testimony of Lewis, Judkins, Ladabauche, Nicholas, Petitioners' Composite Exhibit 2, Petitioners' Exhibits 57, 23) In the "Listing and Brokerage Agreement," Respondents a greed to use its "efforts to secure a purchaser for the property" and to include the property in its directory of "available properties, to be distributed to other real estate brokers." It also contained A the following pertinent undertakings: "4. In consideration of this listing, you agree: To cause said property to be included in your listing directory and in two successive issues of said directory within a period of one year. Contemporaneously with the appearance of said listing in the directory, you agree to direct the efforts of your organization to bringing about a sale of my property; To advertise said property as you deem advisable in magazines or other mediums of merit: I understand that this agreement does not guarantee the sale of my property, but that it does guarantee that you will make an earnest effort pursuant to the aforementioned provisions." (Petitioner's Composite Exhibit 23) Respondent Dorwin testified that he planned to issue a catalog of listed properties in June, 1976 to be distributed to various investors and brokers in the United States and foreign Mailings this depend 7 countries. of catalog were to on responses to .advertisements placed in newspapers around the world and in the United States in April. No action toward any of these goals was taken until March, 1976 when Intermart entered into an agreement with Currency Control Advertising, Miami, Florida, to act as an advertising agency for brochures, printing, copy, layout, typesetting, art, newspaper and magazine advertising, public relations, radio and television. Under this contract, small, one insertion newspaper ads were placed in approximately seven newspapers of various foreign countries and Canada, and in newspapers in Chicago, Los Angeles and New York, costing approximately $500. These ads read as follows: "U.S. Investments Catalogue . . . $9.95 U.S. Complimentary to Investors and to the Trade." Property listings for the catalog were not provided to the advertising agency until the last half of July, 1976. It was not published until August 20th but has not been mailed due to Respondents' current suspension by Petitioner. A few responses were received as a result of the newspaper advertisements but Dorwin testified that nothing was done to follow-up such inquiries because he was waiting for the catalog to be published. Five thousand copies of the catalog were printed at a cost of some $4,500. At the present time, Intermart owes the advertising firm about $2,500 for its work. Dorwin testified that he planned to distribute the catalog to several thousand investors and brokers listed in the International Real Estate Federation, of which he was a member, but that he was unable to do so because of his suspension by Petitioner in July. During the period January-June, 1976, Intermart's records reflected a gross income from the advance fee business of approximately $190,000. About forty-eight per cent of this amount was paid to salesmen for commissions on listing fees, twenty-eight per cent for officers salaries, and about one and one-half per cent was paid for advertising. (Testimony of Dorwin, Weinstein, Stowe, Leader, Petitioner's Exhibits 4, 825) During the last half of June, 1975, Intermart, upon advice of Counsel, in anticipation of a new state law regulating advance fee contracts, stamped on their listing agreements a statement that the parties agreed the advance fee did not constitute trust funds and that the monies therefrom could be expended for expenses. Listing fees received after July 1, 1976, were placed in an Intermart, Inc. trust account of the Capital Bank of North Bay Village, Florida, Account 10452, and as of December 31, 1976, this account showed a balance of $5,083.35 that is being retained by Respondents pending the outcome of present proceedings. (Testimony of Dorwin, Petitioner's Dorwin testified that, although he was aware the other advance fee firms with which he had been associated did not follow through on listings to attempt to make sales, he planned to do so by his newspaper advertisements and issuance of the catalog. However, he admitted that no information was ever sent to any prospective purchaser, that no advertisements were ever placed that described individual parcels of property, and that the only contact ever made with prospective purchasers was by telephone calls. He further admitted that no one from the firm ever checked public records involving the property listed for sale to assure the accuracy of information provided by the owners, and only token visits were ever made to view the listed properties by any member of the firm. He maintained that salesmen were not given a "script" to use but merely an "opening statement" and that they were free to deal with property owners as individuals. He was unaware of where the chart showing sample property values had been obtained and stated that such a chart was not used during Intermart's operations but had been used only during the previous operation at the same address. He denied ever telling salesmen to inform expected sellers that the firm was selling blocks of land but acknowledged that in monitoring telephone conversations of the salesmen, they did exaggerate at times. (Testimony of Dorwin) In view of the totality of the evidence, it is found that the operations of Intermart, Inc. were designed and carried out with the sole intention of extracting monies from landowners with no intent to carry out the stated promises of "earnest efforts" to sell the property.
Recommendation That the certificates of registration of Theodore Dorwin and Intermart, Inc. be revoked pursuant to subsection 475.25(3), F.S. DONE and ENTERED this 11th day of February, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Richard J. R. Parkinson, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Louis B. Guttmann, Esquire 2699 Lee Road Winter Park, Florida 32789 Harold Mendelow, Esquire Manners and Amoon, P.A. 4349 N.W. 36th Street, Suite 106 Miami, Florida 33166
The Issue At issue is whether Respondent committed the violations set forth in the Administrative Complaint dated October 17, 2002, and if so, what penalty should be imposed.
Findings Of Fact Petitioner is the agency responsible for the regulation and discipline of real estate licensees in Florida pursuant to Section 20.125, Florida Statutes (2000). At all times material to this case, Respondent is a licensed real estate broker and holds license number 0349967. In the summer of 2001, Jose Diaz (Diaz) met Saldana at a seminar. The seminar was aimed at persons seeking to participate in federally financed programs designed to assist them in financing home purchases. At the seminar, Diaz was referred to Saldana and described as a person who could assist Diaz in finding a home which could be financed with government funds. Diaz sought Saldana's help in good faith, but Saldana abused Diaz' trust and took advantage of his lack of sophistication in the field of real estate. Specifically, Saldana told Diaz that in order to be eligible for a government financed loan, it would be necessary to pay off certain of Diaz' debts. Saldana instructed Diaz to provide him with blank money orders and represented to Diaz that the money orders would be used by Saldana to pay off the debts so as to facilitate Diaz' receiving a government loan. Saldana failed to deposit the funds with his broker or in an escrow account, and failed to use them for the purposes for which they were intended, that is, to pay off Diaz' debts in order to satisfy government requirements for loaning Diaz funds toward a home purchase. Instead, Saldana converted the funds to his own use. Diaz sued Saldana for civil theft in Palm Beach County Court. On June 19, 2002, a final judgment was entered in Diaz' favor for the full amount of the funds converted, plus interest. As of the date of the final hearing, Saldana had failed to satisfy Diaz' judgment, and had no plans to do so. In early 2001, Rafael Alcocer (Alcocer) met Saldana in a social club and asked him to assist him and his wife in purchasing a home. Saldana agreed, but did little on Alcocer's behalf. Eventually, Alcocer found a home he liked and asked Saldana to present an offer to the homeowner, Diane Dorish (Dorish). Dorish accepted the offer, which included a $500 deposit. However, Saldana falsely told Alcocer that Dorish required a $2,500 deposit, and obtained funds in that amount which Alcocer thought would be used for a deposit required by the homeowner. In fact, Saldana converted those funds to his personal use, although Alcocer was eventually able to recoup $1,500. In addition, Saldana forged Alcocer's signature on a contract which provided for additional terms which had not been authorized by either Alcocer or Dorish. The Division also charged Saldana with collecting a $320 mortgage application fee, plus a $1,000 earnest money deposit from a third client. The Administrative Complaint alleges that Saldana failed to deposit these funds into a trust or escrow account, but instead converted the funds to his own use. However, no evidence was presented in connection with this transaction, and it has not been considered in the disposition of this case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a final order revoking Respondent’s real estate license. DONE AND ENTERED this 24th day of April, 2003, in Tallahassee, Leon County, Florida. ___________________________________ FLORENCE SNYDER RIVAS 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 24th day of April, 2003. COPIES FURNISHED: Lorenzo Level, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N308 Orlando, Florida 32801-1900 Enrique Saldana 7560 Gilmour Court Lake Worth, Florida 33467 Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802N Orlando, Florida 32801-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
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, Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Lawrence R. Dennis is now and was at all times pertinent hereto a licensed real estate broker in the State of Florida having been issued license number 0148366 in accordance with Chapter 475, Florida Statutes. The last license issued was a broker, c/o Dennis & Associates, Inc., 4141 North Miami Avenue, #300, Miami, Florida 33127-2847. Respondent, Dennis & Associates, Inc., is now and was at all times pertinent hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0236428 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 4141 North Miami Avenue, #300, Miami, Florida 33127-2847. Sometime in September or October 1990 Janet Carter saw an advertisement in the Miami Times newspaper for a home for sale by Dennis and Associates, Inc. Mrs. Carter called the telephone number listed in the ad and talked with Mr. Dennis. After speaking with Mr. Dennis about the advertised property Mrs. Carter and her husband viewed the property and ultimately executed a contract to purchase the property which was owned by Dennis and Associates, Inc. Mrs. Carter knew that Mr. Dennis was a licensed real estate broker and felt that she was dealing with him in his capacity as a broker. Mrs. Carter understood that Mr. Dennis's corporation (Dennis & Associates, Inc.) was the owner and seller of the property. Mr. Dennis did not live in the home that the Carters were interested in buying and at all times the Carters were under the assumption that they were negotiating the purchase of a home through a licensed broker. There was, however, insufficient evidence to establish that Mr. Dennis misled the Carters into believing that he was acting in any capacity other than as the president of the corporation that owned the subject property. On or about October 22, 1990, Ms. Carter and her husband, Ruben, executed a Purchase and Sale Contract and Receipt for Deposit for property located at 2001 Northwest 53rd Street, Miami, Florida (Carter contract). The seller of the property was Dennis and Associates, Inc. In the first paragraph of the Carter contract, the receipt of the sum of $500.00 from the buyers as a deposit on account of the purchase price is acknowledged by the seller. The form language in that paragraph referring to the deposit being held in escrow is crossed out. The crossed out language is not signed or initialed by any of the parties to the transaction. 2/ On the second page of the Carter contract, the following provision was not altered by the parties: "Deposit check will be deposited, and the funds held in an escrow account until the sale has been closed." The $500.00 deposit was not paid by the Carters until November 19, 1990. Mrs. Carter believed the earnest money deposit was to be held in an escrow account. After signing the Purchase and Sale Contract and Receipt for Deposit the Carters took the contract to attorney Keith Levarity who prepared a two page Modification of Contract and attached it to the original contract. The Modification of Contract allowed the Carters, at their expense, to obtain a roof and termite inspection. The parties to the transaction agreed to that modification of the contract. Another provision in the Modification of Contract agreement provided that the earnest money deposit in the amount of $500.00 would be held in Mr. Levarity's trust account. Respondents did not agree to that modification and that provision was deleted from the Modification of Contract agreement. The Carters agreed to allow Mr. Dennis to hold the earnest money deposit in his escrow account and that portion of the Modification of Contract that referred to Mr. Levarity holding the earnest money deposit was crossed out, initialed by the Carters and by Mr. Dennis, and dated November 19, 1990. The Modification of Contract also provided that if defects were noted by the inspections, repairs to the house would be made by the sellers prior to the closing of the transaction. On November 19, 1990, Janet Carter gave Respondent Lawrence Dennis check number 541 in the amount of $500.00 as an earnest money deposit for the purchase of the property located at 2001 Northwest 53rd Street, Miami, Florida. The transaction never closed because certain repairs to the property were never made by the Respondents as agreed. On January 14, 1991, Mr. and Mrs. Carter advised Mr. Dennis by letter that they wished to cancel their contract and wanted a full refund of the $500.00 deposit. In addition to the letter of January 14, 1991, Mrs. Carter verbally told Mr. Dennis that the contract was cancelled and that she wanted her $500.00 earnest money deposit refunded. In December 1990, Respondents ordered a roof inspection to determine the extent of the repairs that would be needed. This inspection cost Respondents the sum of $50.00. Under the terms of the Carter contract as modified, the Respondents were to bear the cost of paying for that roof inspection. The Carters never ordered a roof inspection and were not, under the terms of their written contract, obligated to pay for the roof inspection ordered by Mr. Dennis. On or about February 25, 1991, Janet and Ruben Carter signed a release on deposit receipt provided by Mr. Dennis. The release on deposit provided that Mr. Dennis would return $450.00 of the $500.00 earnest money deposit made by the Carters. Mr. Dennis insisted on retaining the sum of $50.00 to pay for the roof inspection that he had ordered. Although the Carters believed they were entitled to the return of all of their earnest money deposit, they agreed to accept the sum of $450.00 on the advice of their attorney. On or about March 8, 1991, Janet Carter filed a complaint against Respondents with the Department of Professional Regulation. As of the time of the formal hearing, the Respondents had not repaid the Carters any portion of the $500.00 earnest money deposit they had made. Kenneth George Rehm is an experienced real estate investigator who had been employed by the Department of Professional Regulation for the ten years preceding the formal hearing. In March or April of 1991 Mr. Rehm went to the registered location of the office of Respondents to talk with Mr. Dennis about the complaint filed with the Department of Professional Regulation by Mrs. Carter. There was no sign indicating that the premises was a real estate office or that Lawrence Dennis was the broker of a real estate office either on the primary entry to the office or on the lobby directory. When Mr. Rehm brought the lack of a proper sign to Mr. Dennis's attention he put up a piece of paper with his name and the name of the company. Respondents established that at one time they had signs on the outside of Mr. Dennis's office suite and on the lobby directory, but that both signs had been stolen. It was not established when the thefts occurred or whether these thefts were the reason there were no signs in March or April 1991. Respondents had replaced their signs by the time of the formal hearing. Mr. Rehm interviewed Mr. Dennis about the Carter transaction on April 8, 1991. When Mr. Rehm asked to review the escrow account, Mr. Dennis told him that the Respondents did not have an escrow account and that, consequently, the Carter deposit was not being held in escrow. When informed by Respondent that there was no escrow account Mr. Rehm asked to review the operating account. Mr. Dennis refused to permit Mr. Rehm review of the operating account. Mr. Dennis telephoned Frederick H. Wilsen, Petitioner's Chief Staff Attorney, and inquired as to whether he had to give the operating account records to Mr. Rehm. After talking with Mr. Wilsen, Mr. Dennis agreed to allow Mr. Rehm review of the records for the operating account. On April 9, 1991, Mr. Rehm prepared a subpoena duces tecum directing Mr. Dennis as broker for Dennis and Associates, Inc., to produce at Petitioner's offices in Miami on April 15, 1991, all monthly bank statements, bank deposit slips, and cancelled checks for operating accounts and/or escrow accounts for the period of April 1, 1990, to the time of service of the subpoena on April 9, 1991. During Mr. Rehm's initial interview of Mr. Dennis he was told by Mr. Dennis that he could bring the subpoena to Respondents's office the following day at approximately 10:00. Mr. Rehm attempted to serve the subpoena at that time but Mr. Dennis was not at the office. Mr. Rehm contacted Mr. Dennis who indicated he would be at his office at approximately noon. Mr. Rehm was at Respondents's office at noon and Mr. Dennis was not there. Mr. Rehm returned to Respondents's office a third time in the afternoon and successfully served the subpoena duces tecum on Mr. Dennis. Mr. Dennis came to Mr. Rehm's office on April 15, 1991, but did not produce all the documents outlined in the subpoena duces tecum. On April 15, 1991, Mr. Rehm asked Mr. Dennis to produce cancelled checks and a bank statement for March of 1991. Mr. Dennis never complied with that request. The request for these records was within the scope of the subpoena. In response to the subpoena, Mr. Dennis gave Mr. Rehm a copy of two of the monthly bank statements for an escrow account (account number 20300562106) in the name of Dennis and Associates, Inc., at Eagle National Bank. The monthly statement for the period ending November 30, 1989, reflected that an overdraft in the amount of $8.91 existed in the account resulting from a bank service charge. The monthly statement for the period ending January 10, 1990, reflected a zero balance. There was no evidence of any activity in the escrow account subsequent to January 10, 1990. Mr. Dennis asserted the position that he did not have to provide records for an escrow account because Respondents did not have an active escrow account. That position is rejected. The evidence establishes that Respondents had, as of January 10, 1990, an escrow account at Eagle National Bank, and there was no persuasive evidence that this account had ever been closed. The documentary evidence introduced in this proceeding establishes that, as of January 10, 1990, the escrow account had a zero balance, but it does not establish that the account was closed. Mr. Dennis's testimony that he had asked that the account be closed is insufficient to establish that the account was closed, nor did it establish that Respondents were relieved of their duty to provide documentation in response to the subpoena that would enable Mr. Rehm to either audit the escrow account or verify that the account had been closed. When Mr. Rehm discussed the Carter contract with Mr. Dennis in late March 1991, Mr. Dennis stated he would return $450.00 of the $500.00 earnest money deposit to the Carters in the first week of April 1991. As of the date of the formal hearing Respondents had not refunded any of the earnest money deposit to the Carters. On or about November 30, 1990, a Final Judgment in case #90-2559-SP020 in the County Court in and for Dade County, Florida, was entered against Respondent Lawrence R. Dennis d/b/a Dennis & Associates, Inc., in favor of Nathaniel A. Greenidge and Joycelyn B. Greenidge. The award of the Final Judgment was for the principal sum of $3,200.00, prejudgment interest of $44.80, costs of $70.50 and attorneys' fees of $200.00 for a total of $3,515.30. The Final Judgment obtained by the Greenidges was a result of Respondents's refusal to refund an earnest money deposit taken by Respondents in conjunction with a real estate transaction involving Respondents as the seller of the property. Respondents refused to honor said Final Judgment, so the Greenidges had to levy on the subject real property and set it for Sheriff's sale on April 3, 1991. In an effort to obtain the debt owed by Respondents, the Greenidges entered into an agreement to cancel the Sheriff's sale in exchange for receipt of $3,500.00 from a third party purchasing the property. The agreement set a closing on or before 30 days from the date of the agreement. Respondents did not timely pay the Greenidges. On or about March 27, 1992, Respondents paid the Greenidges approximately $3,000.00, which they accepted in satisfaction of the final judgment. On or about October 16, 1990, the Respondents were issued a letter of guidance from the Florida Real Estate Commission for a violation of Section 475.25(1)(d), Florida Statutes, and Rule 21V-10.032, Florida Administrative Code. On or about February 19, 1991, a Final Order was issued by the Florida Real Estate Commission in DOAH Case No. 90-5124 (DPR Case Nos. 0148366 and 0236428) incorporating a stipulation disciplining Respondent for breach of trust in a business transaction, failure to account and deliver a deposit and failure to notify the Florida Real Estate Commission of a deposit dispute. That proceeding pertained to dealings between Respondents and Gwendolyn King and Roxie Ann King. On or about August 26, 1991, Mr. Wilsen, sent a letter to Respondents in reply to a letter sent to Mr. Wilsen by Respondents on or about July 31, 1991. Mr. Wilsen's letter stated, in pertinent part: It is a matter of private agreement as to who will hold the deposit and where the account will be maintained. As the property owner, you may hold the funds so long as you have the mutual prior knowledge and consent of the parties you are dealing with in the transaction." The King, Greenidge, and Carter transactions all occurred prior to Respondents's July 31, 1991, letter to Mr. Wilsen. Mr. Dennis did not rely on Mr. Wilsen's reply in his dealings with the Kings, the Carters, or the Greenidges.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which adopts the findings of fact contained herein and which suspends the licensure of both Respondents for a period of one year and which assesses an administrative fine in the total amount of $500.00. DONE AND ORDERED this 9th day of July, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 9th day of July, 1992.
