The Issue The issue in this case is whether respondent's real estate license should be disciplined for the reasons given in the administrative complaint filed on March 9, 1994.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Jennifer Dawn Jewels, held real estate salesperson license number 0380700 issued by petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). When the events herein occurred, respondent was employed as a salesperson at Jennifer Jewels Real Estate, Inc., 2865 Plummers Cove Road, Jacksonville, Florida. On September 30, 1993, respondent's license became involuntary inactive and invalid due to non-renewal. It remained in that status until February 22, 1994, when respondent late-renewed her license as voluntary inactive. On October 20, 1993, Sandra Bryant, a broker/salesperson with Prudential Network Realty in Jacksonville, Florida, prepared a deposit receipt and purchase and sale agreement on behalf of David and Kathryn Pierce for a residence located at 12085 Dividing Oaks Trail, East, Jacksonville, Florida. The contract was presented to respondent, who was the listing agent for the sellers, Robert and Janet Kreis. The contract was eventually accepted on October 25, 1993, after a counteroffer was prepared and submitted by respondent. Respondent admits that she handled the transaction on behalf of the sellers and received a commission for her services. This occurred when she did not have an active license. On September 17, 1993, respondent solicited and obtained a listing agreement for a residence located at 938 West Satsuma Circle, Jacksonville, Florida. The property was listed in the multiple listing service maintained by the local board of realtors. Based on that listing, Sandra Mannis, a real estate salesperson with Prudential Network Realty in Jacksonville, Florida made an appointment to show the property. When Mannis showed the property on January 20, 1994, she executed a rejection of subagency and sent it to respondent, who signed the document as an agent for the seller. At that time, respondent did not hold an active license. Paragraph 10.b. of the complaint also alleges that on November 19, 1993, respondent "solicited and obtained a listing agreement from Thomas A. and Judith Ann Boyles for the sale of property located at 12343 Silent Brook Trail, N., Jacksonville, Florida." There is, however, no evidence to support this charge. At hearing, respondent acknowledged that her license lapsed in September 1993, but said this was inadvertent and unintentional. Later, after learning her license had not been renewed, she took 14 hours of courses in order to reactivate her license. Respondent pointed out that during an eighteen month period, the firm had $23 million in closings, and contended these transactions are the only "bad" sales out of that total. On August 16, 1994, respondent was reprimanded, placed on one year probation, fined $500 and ordered to take a 45 hour post-licensure education course for "culpable negligence; improper use of Realtor identification or designation; operat(ing) as a salesperson without being holder of a valid and current license as a salesperson; (and) advertis(ing) property or services which is misleading in form or content." Other than that proceeding, there is no evidence that she has been the subject of any other disciplinary action during her fourteen year tenure as a licensee. Finally, it is noted that neither the consumers or the public suffered harm by virtue of respondent's conduct.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner enter a final order finding respondent guilty of violating Section 475.42(1)(a), Florida Statutes, on two occasions and that her license be suspended for one year. DONE AND ENTERED this 14th day of August, 1995, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-3952 Petitioner: Petitioner's proposed findings have generally been accepted, with certain modifications. COPIES FURNISHED: Janine B. Myrick, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Ms. Jennifer D. Jewels 110 Coral Fish Lane East Jupiter, Florida 33477 Darlene F. Keller, Director Division of Real Estate P. O. Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact At all times material hereto, Respondent Mark S. Henderson (hereinafter "Henderson") has been a real estate salesman licensed in the State of Florida, having been issued License No. 0441662. At all times material hereto, Respondent Auction World of West Florida, Inc., (hereinafter "Auction World") has been a corporate real estate broker registered in the State of Florida, having been issued License No. 0238372. Respondent Henderson is a real estate salesman/auctioneer employed by Auction World. He moved to Florida in October, 1984, and became a licensed real estate salesman in Florida in February, 1985, some 8 months prior to the transaction forming the basis for the Administrative Complaint. John and Joanne Henneberry signed a listing for the auction/sale of their home with Auction World through Henderson. The Henneberrys are both educated people who had prior experience in buying and selling real estate. The October 1, 1985 listing signed by the Henneberrys provided that it was a 30-day listings provided for a seven percent commission, provided for the Henneberrys to pay advertising costs not to exceed $750, and provided specifically that the $750 would not be considered as an advance fee. The listing further provided for an accounting to be made within 30 days. The Henneberrys gave Auction World a check for $750. The Henneberrys' best friend is Ralph Marciano, a real estate broker. He sold his home through Auction World and referred the Henneberrys to Auction World. The Henneberrys purchased a home through Marciano and throughout the transactions involved here consulted Marciano about how to proceed. Auction World was engaged primarily to sell the Henneberrys' home in Lehigh Acres, and Marciano was involved in the purchase or offers to purchase their new home. Pursuant to the listings advertising for the auction was published by Auction World. The auction was held on October 19, 1985, but no sale resulted from the contract negotiated through the auction. Auction World continued to work on behalf of the Henneberrys pursuant to an oral extension. Johan Ruhe and his wife were advised by Henderson of the availability of the Henneberrys' home in Lehigh Acres. Johan Ruhe is a retired real estate broker who now works for Lee County as its Director of Land Management. In December, 1984, an offer of $66,000 was made by the Ruhes to the Henneberrys through Auction World, but this offer was not accepted. On January 2 or 3, 1985, the Ruhes made an offer on the Henneberrys' home in the amount of $68,000. The offer provided for no down payment; included the range, refrigerator, dishwasher, washer, dryer, curtains and draperies to be included in the sale price; and called for financing over 30 years at an 11 percent fixed rate of interest. It further required that financing be obtained for 80 to 95 percent of the purchase price. This offer was accepted by the Henneberrys, and all parties considered this to be a binding legal contract. The original listing had called for a 7 percent commission, but when the $68,000 contract was signed, the Henneberrys negotiated Auction World from a 7 percent commission down to a $3,000 commission. The Ruhes filed a loan application with B. F. Saul Mortgage Company (hereinafter "B. F. Saul") based upon the $68,000 contract. B. F. Saul has an office in Fort Myers, Florida, which was opened on May 2, 1983, by Robert W. Prange (hereinafter "Prange") who at all times relevant to this action was a vice-president of B. F. Saul and branch manager of the local office. On January 11, 1986, the Henneberrys made an offer to purchase a home from the Jamilles, which was contingent on the Henneberrys closing with the Ruhes. Prior to signing the contract with the Ruhes, the Henneberrys discussed the contract with their best friend, real estate broker Marciano who made changes to the contract and discussed with the Henneberrys the fact that there was no deposit provided in reference to that contract. After the Henneberrys signed the contract to purchase a home from the Jamilles, the Jamilles' broker indicated to the Henneberrys that the Jamilles would like the Henneberrys' contract with the Ruhes to have a provision for a deposit. During this period of time, the Henneberrys were in direct contact with Prange at B. F. Saul, and Prange indicated to them that there was no problem with the Ruhe contract and loan application. After the Jamilles' broker contacted the Henneberrys and asked for a contract showing an escrow deposit on the Henneberry home, the Henneberrys contacted Henderson at Auction World and asked him to draw a new contract to show that a down payment had been made. Henderson prepared a new contract, and the Ruhes signed it. The new contract showed a deposit of $3,600, a purchase price increase of $3,600, and a commission increase of $3,600. In order to show the deposit requested by the Henneberrys, Auction World "gifted" by letter the $3,600 to the Ruhes. The contract was then presented to the Henneberrys. In fact, the Ruhes were not paying $3,600 more to purchase the home for which they already had a contract. Since the new agreement increased the commission by $3,600, Auction World by letter was giving back that sum to the Ruhes so that everything actually stayed the same but an escrow was shown as requested by the Henneberrys. The Henneberrys signed the new contract. At the time that they signed, they knew that the Ruhes were not paying the $3,600 additional purchase price. About the same time that the Henneberrys were requesting that the contract be redrawn to reflect a down payment from the Ruhes, Prange at B. F. Saul became concerned as to whether the Ruhes had sufficient cash available to them to consummate the transaction. When the second contract was taken by Henderson to Prange, Prange suggested that a change be made in it from a fixed interest rate to a variable interest rate so that the Ruhes could qualify for the loan. Prange then "whited out" the listing of personal property that appeared in the contract, suggesting that the deletion of the personal property would reflect an increased value in the price of the real estate. Although Prange was an officer of B. F. Saul, he was on a commission basis. He was not only the loan officer on the Henneberrys/Ruhes transaction, he was also the loan officer on the Henneberrys/Jamilles transaction. Accordingly, he knew that a successful consummation of the Ruhe transaction would ensure him of receiving two commissions but that a lack of success on the Ruhe transaction would automatically defeat the Jamille transaction. Prange knew that there was no escrow of $3,600 as reflected by the second contract Henderson presented to him. Yet, he requested Henderson to execute a "Verification of Earnest Money" form, which stated that an earnest money deposit had been received in the amount of $3,600 to be held toward the down payment and/or closing costs on the Henneberrys home. The form did not represent that the money was held in escrow, nor did it differentiate between whether that money was the down payment toward the purchase or whether that money was to be used toward closing costs. Henderson signed the verification that the $3,600 deposit was being held by Auction World because he believed the gift to the Ruhes was the same as having the deposit since it was Auction World's $3,600. Additionally, the buyer, the seller, and the loan officer were aware of the contents and reasons for the series of contracts, and the gift was evident from the series of contracts involved. Henderson prepared another contract. He also prepared an addendum to that contract containing an agreement on the purchase of the personal property since he believed the personal property had to be mentioned somewhere in order to protect both the buyer and the seller. The addendum was signed on or about February 13, 1985. The newest contract also provided for the seller to pay the closing costs. When the addendum was presented to the Henneberrys they insisted that an additional provision be added to the addendum that would guarantee that the buyer would pay the Henneberrys $4,000 toward the closing costs prior to the closing. Therefore, at the Henneberrys' request, language was added to the addendum to provide that $4,000 would be paid to the Henneberrys 72 hours prior to the closing by either Auction World or by the Ruhes. Despite the efforts of Henderson and Prange to successfully structure the Henneberry/Ruhe transaction, the Ruhes were not able to obtain approval on their loan application, and the Henneberry/Ruhe sale was not consummated. The listing agreement for the auction of the Henneberry home required that the Henneberrys pay $750 to Auction World to pay for the costs of advertising the auction. The listing contract specifically provided that the $750 did not represent an advance fee but simply represented costs of advertising. Since the statutes regulating the real estate profession do not define what constitutes an advance fee, Henderson consulted an attorney regarding the desire to obtain advertising costs in advance. The listing form used and the method of handling the Henneberrys' $750 was in compliance with the recommendation to Auction World and Henderson by that attorney. The legal advice given to them was that none of the $750 should be used on any overhead or internal expenses but rather the $750 must all be spent on independent outside advertising. Since the listing agreement specified that the $750 was not an advance fee, and since Henderson and Auction World followed the procedure recommended to them by an attorney, all parties believed that the funds were not an advance fee. The listing called for an accounting within 30 days, and an oral accounting was provided at that time. The Henneberrys did not request a further accounting until February 27 or 28, 1985. A written accounting was provided by March 11, 1985. No evidence was offered to show that any of the $750 was kept other than in a trust or escrow account at Auction World, and no evidence was offered to indicate that any of it was misused. In fact, the advertising expenses on the Henneberry home exceeded $750, and Auction World bore the extra expense.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered finding Respondents Henderson and Auction World not guilty of the allegations contained within Counts I, III, and V, and dismissing the Administrative Complaint filed against them. DONE and RECOMMENDED this 3rd day of November, 1987, at Tallahassee, Florida. LINDA M. RIGOT, 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 3rd day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0602 Respondents Henderson and Auction World's proposed findings of fact numbered 1, 30, 35, 36, and 38 have been rejected as not constituting findings or fact but rather as constituting conclusions of law or argument of counsel. Respondents Henderson and Auction World's proposed findings of fact numbered 2, 6, and 7 have been rejected as being immaterial to the issues under consideration herein. Respondents Henderson and Auction World's proposed findings of fact numbered 3-5, 8-29, 31-34, 37, and 39-42 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Arthur R. Shell, Jr., Esquire Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 E. G. Couse Esquire Post Office Drawer 1647 Fort Myers, Florida 33902 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue As stipulated by the parties and as reflected in the Amended Administrative Complaint dated September 28, 1992 the issues for resolution are whether Respondent misrepresented property for sale at auction or made false promises concerning the use, value or condition of such property; whether this conduct demonstrates bad faith or dishonesty; whether Respondent failed to appropriately conduct and maintain control of the auction; and whether the Respondent used false bidders, cappers or shills. (Joint Prehearing Statement filed 9/28/92) If those violations occurred, an appropriate penalty must be determined.
Findings Of Fact Respondent, Ronald Ray Kool, Sr., (Kool) has been licensed continually as an auctioneer in the State of Florida since approximately 1988, having been issued license number AU 0000510. He is the registered owner of the business, A-Plus Auctions, which is issued license number AB 0000071. On July 9, 1990, Respondent contracted with Dr. Florence Alexander for the conduct of an auction at the Ebon Center, in Titusville, Florida. The contract was renegotiated, and a subsequent written contract was entered between the parties on July 26, 1990, for the auction to be held on July 28, 1990. The latter contract provided that the auction was a reserve auction, that is, minimum bids were provided by Dr. Alexander for the items offered for sale. Prior to the auction, on July 27, 1990, some items originally included in the list for the auction were sold by Ebon Galleries, and numerous other items were substituted. This was satisfactory to Kool as the potential commission on the substitute items was considerably larger. This transaction constituted an oral amendment by the parties. As advertised, the auction commenced at 10:00 a.m., July 28, 1990 at the Ebon Center in Titusville. The goods for sale were on display and available for inspection by the bidders prior to, and during the auction in a large warehouse area where the auction was being held. The items were mostly oriental pots, vases, lamps, ceramic figures, mugs, frames, and other decorator pieces and bric-a-brac. There were approximately 200-250 bidders. As they entered the auction area all bidders were given a perforated card to fill out. The lower portion included their name, address, phone number and assigned bidder identification number. This was detached and given to the auction clerk. The top portion was retained by the bidder and included the assigned bidder number and this text: EVERYTHING MUST BE PAID IN FULL ON THE DAY OF THE AUCTION regardless of when it is picked up. Everything will be sold "as is, where is", with no guarantees of any kind, regardless of statement of condition made from the auction block. Buyers shall rely entirely on their own inspection and information Every effort is made to "guard" merchandise throughout the auction; however, the bidder becomes solely responsible for all items purchased by him immediately following his winning bid. Therefore, he is advised to further guard his items at his own discretion. The Bidder is responsible for knowing which items he is bidding on. If he is unsure, he should inquire or not bid. When you become the winning bidder at auction you have effected a contract and will be expected to pay for items in which you were evidenced to be the successful bidder. Auctioneer will not honor "mistakes". The Auctioneer reserves the right to accept bids in any increment he feels is in the best interest of his client, the seller. The Auctioneer reserves the right to reject the bidding of any person whose conduct, auctions, or adverse comments he feels are not in the best interest of the seller. (Petitioner's Ex. #14, deposition of Kool, ex. 6 to deposition) At the commencement of the auction Kool announced various ground rules or terms of the auction, including the fact that this was not an absolute auction, that bidders had an obligation to inspect merchandise because they were responsible for what they bought and that there was a ten percent buyer's premium on the sales. "Buyer's premium" is a surcharge on the bid price, which surcharge is received by the auctioneer, along with his commission from the seller. Kool also introduced his employees and informed the gathered bidders that he and his employees would bid if they wished and the bidders would know when employees were bidding. Kool and his employees were assigned bidder numbers 502 through 509. The male employees wore gray slacks and gray shirts with "A-Plus Auctions" embroidered on the shirts. The women employees wore blue dresses with "A-Plus Auctions" inscribed. The employees were up front working behind the table and in front of the auctioneer. When they bid, they raised their hands like anyone else. Max Algase and Herbert Michaels arrived at the auction just as the introduction was being completed. Max Algase was assigned bidder number 569 and received the card described above. Max Algase describes himself as a "liquidator"; he buys and sells merchandise, including entire stores or chains of stores and occasionally attends auctions. Herbert Michaels is a good friend and sometimes business associate of Algase. Michaels is on disability retirement from Zayre's Department Stores, where he was merchandise manager for twenty years and was responsible for twenty-eight stores' apparel, comprising $85 million in sales. At some point during the auction, Shirley Thompson (now Shirley Thompson Effron) sat down next to the two men and introduced herself. The three individuals decided to form a partnership, each putting up a third for the purchases at the auction, and then reselling the items later in a shop that they would open for that purpose. Algase considered the venture "a lark" rather than a serious business deal. (Transcript, p. 51) So many purchases were made by bidder number 569 (Algase, or Liquidators III, the ad hoc partnership) that during the course of the auction, the computer program utilized by Kool ran out of data space for that number, and another number, 626, was assigned. During the auction the seller, Dr. Alexander obtained bidder number 604 and she purchased three items. When Kool recognized her as a purchaser, he turned the auction block over to another auctioneer and confronted Dr. Alexander, telling her that it was inappropriate for her to bid. The items she had purchased were put back up for sale. Towards the end of the auction, Dr. Alexander approached Kool and asked about placing some racks of clothing up for sale. He agreed, reluctantly, because clothing sales are time-consuming, and the racks of clothes were wheeled out to the warehouse floor. The clothes were in two categories, one group was a large number of heavy woolen items, coats, capes, jackets, suits and the like; the other, smaller group was mostly lightweight dresses, bathing suits and similar items. Kool announced the clothes would be placed for sale and invited the bidders to go look at them. About five or ten minutes later bidding started on the items, "bidders choice". That means the individual who bid highest would get the first choice of the multiple items. The reserve, or lowest bid acceptable, was $75.00 each. After ten or fifteen minutes, only a few items had been sold and Kool told Dr. Alexander to remove them from the floor. She and her father wheeled the racks back into the front showroom of the building. One of the participants interested in the clothing was Herbert Michaels. He inspected the racks, felt and touched the clothing and convinced Algase that the items were well worth $35.00 a piece. The partners bought the woolen items for $35.00 each, and the lighter items at $10.00 each. All three partners have a different version of how the sale took place. Herbert Michaels claims that Kool, while off the auction block, negotiated the sale with Max Algase and Shirley Thompson Effron; Max Algase claims that after the woolen items were offered at "bidders choice", they were offered from the block at "bidder take all", and he won the bid at $35.00 apiece. Shirley Thompson Effron claims that after the clothing was removed from the floor, Dr. Alexander approached their group and negotiated the sale with Max Algase. The latter version is consistent with Kool's testimony and that of his other witnesses and is credited. The latter version is also consistent with a tally sheet identified by Kool as a paper brought to him by Dr. Alexander approving the transaction. (Petitioner's Ex. 14, Kool deposition, exhibit 6 to the deposition) During the clothing deal, Algase, Herbert Michaels and Shirley Thompson Effron went to the showroom while Kool's employees counted the items. There were 550 woolen items and 88 lighter items, with a total cost of $19,250.00 for the former and $880.00 for the latter. The counts are reflected on the tally sheet given to Kool. Algase paid for these and other items purchased at the auction with a check. Later, he made arrangements with Mrs. Kool to substitute cash and he did so on Tuesday of the following week, when he had all of the clothing loaded into large trucks for removal from the Ebon Center. The Liquidators III venture was not successful. Few of the items were resold as they had hoped. The relationship between Shirley Thompson Effron and Max Algase deteriorated and he is suing her husband's corporation. On November 7, 1990, Shirley Thompson Effron, as secretary of the partnership, and at the insistence of Max Algase, sent a letter to Ron Kool complaining that they bargained for, and bought, coats, but that more than half of the items were dresses, suits or skirts. The letter demanded "full restitution immediately". (Petitioner's Ex. 11) In March 1991, Algase complained to the Department of Professional Regulation, and Investigator Bobby Hunter conducted interviews and gathered documents, including the records maintained by A-Plus Auctions for the July 1990 auction. Those records reflect the bidder number 500 for many items, with a "0" final settlement price. That is a number assigned by Mrs. Kool, a licensed auctioneer and the business manager for the company, to account for items which were offered for sale but did not reach the minimum bid set by the seller, Dr. Alexander. Bidder numbers assigned to A-Plus employees show purchases of several items, mostly small, less than $10.00, the largest amount being $40.00. The records also reflect that the 550 woolen items bought by Algase and his partners are described as "coats" on the final settlement printout. This description was assigned by an employee of A-Plus Auctions when the items were offered for sale. There is no credible evidence that Kool described the items from the auction block as only coats. Rather, he described woolen clothing, including alpaca coats from Central or South America. Herbert Michaels conceded that he knew the items were not all coats before the sale was made because he had inspected the racks on the floor. He found capes as well as coats, and tops to ensembles. (Transcript, p. 34) Several expert auctioneers testified on behalf of the parties, one on behalf of Petitioner and two for the Respondent, with a combined experience of 62 years in auctioneering. Their opinions did not vary substantially. They expressed concern with the fact that the owner, Dr. Alexander, managed to bid on several lots, but they agreed that Kool handled the problem properly after he discovered it. They also agreed that side deals like the one involving the clothing deprive the general public of an opportunity to participate, but they are not illegal so long as records are kept and funds, including the commission, are disbursed and accounted for. The experts described the practice, more common in the past than now, of "dropping on the house number". An auctioneer can falsely raise bids by acknowledging a phony bid. If the phony bid is not raised, the auctioneer is stuck with it and announces the sale to a "house number", not associated with any real bidder, but in the words of R. L. Huntsinger, bid by "Mr. Wall", "Mr. Floor", "Mr. Ceiling", etc. The appearance of the number 500 without a bidder identified, in Kool's records of the auction, raised the suspicion that this illegal practice was used. Respondent and his witnesses adequately explained why the number was used, however, to account for items that did not reach the reserve minimum bid. Even Petitioner's expert conceded that he could not say that the practice was used in this case. (Transcript, p. 180) Petitioner's expert also opined that any errors committed by Respondent were due to lack of knowledge and not because of an intent to defraud the public or the seller. (Transcript, p. 193) The weight of evidence, taking into consideration the demeanor and credibility of the witnesses, fails to support a finding that Respondent Kool committed the violations alleged. He did not misrepresent the property being sold. The clothing was described as such, and not as only "coats". The complainants, sophisticated and experienced business people, had an opportunity to inspect the items and knew what they were buying. There is no evidence of bad faith or dishonesty and the evidence presented by Respondent effectively forecloses a finding that he used or permitted the use of false bidders. Although Max Algase was not required to re-register when he was assigned a subsequent number, the records produced at hearing confirm the testimony of Mrs. Kool that Algase was bidder number 626. The auction on July 28, 1990 was an all-day affair with a high volume of goods to be moved. As principal auctioneer, Kool was in charge and maintained control. He hired experienced, competent employees and utilized only licensed auctioneers in calling the bids. Certain tasks were appropriately delegated to his wife, also a licensed auctioneer. Recordkeeping was thorough and substantially accurate. While Respondent regrets that the seller, Dr. Alexander, was given a bidder number and managed to bid, her participation, as concluded below, is not prohibited.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That a final order be entered finding no violation by Respondent and dismissing the amended administrative complaint. DONE AND RECOMMENDED this 24th day of May, 1993, in Tallahassee, Leon County, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of May, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3112 The following are specific rulings on the findings of fact proposed by the parties: Petitioner's Proposed Findings 1.-2. Adopted in paragraph 1. Adopted in paragraph 2. Rejected as irrelevant. Included in paragraph 3. Rejected as irrelevant. Adopted in paragraph 4. Rejected as irrelevant (see paragraph 3.) Rejected as irrelevant. Included in paragraph 9. Adopted in paragraph 8. 12.-14. Rejected as unnecessary. The clothing was not described at auction as only coats. Rejected as contrary to the weight of evidence. (see 12-14, above) Rejected as unnecessary. Adopted in paragraph 11. 18.-19. Adopted in paragraph 12. Rejected as unnecessary, but addressed by implication in paragraph 21. Adopted in paragraph 13. Adopted in paragraph 14. Adopted in paragraph 13. and 14. Addressed in paragraph 21, but the implication of illegality is rejected as contrary to the law and rules. Rejected as irrelevant. Adopted in paragraph 16. Rejected as unnecessary. Adopted in summary in paragraph 16. Rejected as contrary to the weight of evidence. 30.-31. Rejected as irrelevant, and contrary to the weight of evidence. Adopted in paragraph 17. Rejected as contrary to the weight of evidence and a misstatement of the expert's testimony. The witness was responding to a hypothetical question. 34.-35. Adopted in paragraph 6. 36. Addressed in paragraphs 21. and 26. 37.-44. Rejected as unnecessary. 45. Adopted in paragraph 10. 46.-50. Rejected as immaterial. 51. Rejected as contrary to the weight of evidence. "Control" also means delegation to competent staff. See Rule 21BB-5.001(2), F.A.C. 52.-55. Rejected as irrelevant. These proposed facts do not relate to any alleged violation of statute or rule. Respondent's Proposed Facts 1.-3. Adopted in paragraph 1. 4. Adopted in paragraph 2. 5.-6. Adopted in paragraph 4. 7. Adopted in paragraph 5. 8. Adopted in paragraph 7. 9. Adopted in paragraph 2. and 6. 10. Adopted in paragraph 4. 11. Adopted in paragraph 5. 12. Adopted in paragraph 6. 13. Adopted in paragraph 19. 14. Adopted in paragraph 10. 15. Adopted in paragraph 11. 16. Adopted in paragraph 8. 17. Adopted in paragraph 15. 18. Adopted in paragraph 12. 19. Adopted in paragraph 15. Rejected as unnecessary. Adopted in paragraph 26. Rejected as unnecessary; included by implication in paragraph 24. COPIES FURNISHED: Anthony Cammarata, Senior Attorney Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Joseph E. Miniclier, Esquire 1970 Michigan Avenue Building E Cocoa, Florida 32924-8248 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Suzanne Lee, Executive Director Department of Professional Regulation Board of Auctioneers 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792
The Issue The issues to be determined are whether Respondent violated sections 475.25(1)(e), 475.42(1)(b), and 475.42(1)(d), Florida Statutes (2011), and Florida Administrative Code Rule 61J2- 14.009, as alleged in the Administrative Complaint, and, if so, what penalty should be imposed?
Findings Of Fact The Department is the state agency charged with the licensing and regulation of the real estate industry in the state of Florida, pursuant to section 20.165 and chapters 455 and 475, Florida Statutes. At all times material to this proceeding, Respondent was a licensed real estate sales associate having been issued license number 3101946. During the time relevant to this case, Respondent was a sales associate affiliated with Bahia Real Estate ("Bahia"), a brokerage company owned by Raul and Ricardo Aleman, with offices located in Miami, Orlando, and Tampa, Florida. Respondent was employed in Bahia's Miami location. In 2010, Respondent acted as a sales associate on behalf of Michael Perricone for a real estate transaction involving the purchase of a condominium in the Blue Lagoon Towers ("Blue Lagoon") in Miami which was purchased as an investment. Mr. Perricone's sister, Francesca Palmeri, and her husband, Santo Palmeri, were present at the closing where they met Respondent for the first and only time. During the closing, which lasted approximately one hour, the Palmeris indicated to Respondent that they would be interested in making a similar purchase of investment property if another comparable condominium unit became available at Blue Lagoon. The Palmeris had no further interaction with Respondent until he contacted them at their home in Pueblo, Colorado, in 2011 to advise them of the availability of a condominium for sale at Blue Lagoon. On or about October 6, 2011, Respondent faxed a partially completed Bahia form "'AS IS' Residential Contract for Sale and Purchase" to Mrs. Palmeri for the Palmeris to use in making an offer on a condominium unit located at 5077 Northwest Seventh Street, Miami, Florida. Prior to forwarding the document to Mrs. Palmeri, Respondent wrote on the form the property description, the escrow agent name and address, the initial escrow deposit amount and additional deposit, the time for acceptance, the closing date, and listed himself as the "Cooperating Sales Associate" with "Bahia Realty Group, LLC." The Palmeris decided to offer a $125,000.00 purchase price. Respondent directed Mrs. Palmeri to complete the contract and provide a ten percent escrow deposit. Mrs. Palmeri entered a purchase price of $125,000.00, initialed each page, and signed the form as "Buyer." Respondent provided Mrs. Palmeri with instructions on how to wire the funds for the escrow deposit. On October 7, 2011, Mr. Palmeri wired $12,000.00 to J.P. Morgan Chase, which was then deposited in an account for Bonaventure Enterprises, LLC ("Bonaventure").1/ The Palmeris had no knowledge of Bonaventure, but, based upon the representations of Respondent, they understood the money they were asked to wire to the J.P. Morgan Chase account of Bonaventure was an escrow deposit for the property they intended to purchase at Blue Lagoon. The Palmeris had no discussion with Respondent regarding the reason for sending the escrow deposit to Bonaventure. They assumed that Bonaventure was somehow related to the seller or its title company. The condominium unit in question was bank owned; however, the Palmeris were not informed of this. No evidence was presented that Respondent had an ownership interest in Bonaventure. However, Bonaventure is owned by Respondent's brother and sister-in-law. At all times material hereto, Respondent was the managing member of Bonaventure. Bonaventure is not a licensed real estate broker. Bahia does not maintain an escrow account, and its sales associates are authorized to use title companies of their choice for receipt of escrow deposits. Respondent was aware that he was unable to accept the escrow deposit of the Palmeris in his own name, because, as a licensed real estate sales associate, he is prohibited from receiving the money associated with a real estate transaction in the name of anyone other than his broker or employer. In fact, Respondent was disciplined in 2010 for a similar violation.2/ Respondent claims that the Palmeris entrusted him with their $12,000.00 to hold for possible investments, not necessarily related to real estate transaction, and he was doing it as a favor for them as "friends." Respondent contradicted himself by stating his intention in directing the Palmeris to deposit their money into the Bonaventure account was to help them have cash on hand in Florida in order to meet the Blue Lagoon condominium seller's requirements to make the escrow deposit with the seller's title company within 24 hours after an offer was accepted. The Palmeris had no knowledge of the seller's unique restrictions on the escrow money. Further, Respondent's asserted motive in requesting the $12,000.00 to have cash on hand in Florida is undermined by the fact that, if the Palmeris could wire $12,000.00 to Bonaventure's bank account, they could also wire the funds directly to a title company chosen by the selling bank after acceptance of their offer. Shortly after returning the contract to Respondent and sending the escrow deposit, Mrs. Palmeri discussed increasing the purchase price by $1,000.00 for a total of $126,000.00. Based upon the language of the proposed contract, the Palmeris expected a response to their offer within 24 hours. Immediately thereafter, Respondent told the Palmeris that they were "in negotiations." However, almost a month passed before they heard from Respondent regarding the status of the purchase of the condominium. On or about November 4, 2011, Respondent contacted Mrs. Palmeri and stated that he had "good news." He indicated that the seller would be willing to sell the property for a price of $129,500.00. According to Respondent, the seller requested documentation from the Palmeris' bank indicating their ability to pay. Mrs. Palmeri indicated that this was not an acceptable counter-offer. Respondent suggested that he could negotiate a sales price of $129,000.00, but he needed the Palmeris to send an additional $9,000.00 to put into escrow. Mrs. Palmeri told Respondent that she was no longer interested in the property because their maximum offer was $126,000.00. During the same conversation, Mrs. Palmeri asked for the return of her deposit. Respondent expressed agitation that she was retreating from the possible purchase because he had done "so much work." Respondent clearly anticipated he would receive a commission if the deal was consummated. The Palmeris did not get an immediate return of their escrow deposit. Mrs. Palmeri called Respondent repeatedly and received no answer. She also sent an e-mail to J.P. Morgan Chase trying to find out the status of the deposit and received no reply. Mrs. Palmeri again attempted to contact Respondent on November 18, 2011, and left him a message that he needed to call her regarding the deposit. After receiving no response, she contacted Bahia and spoke with Ricardo Aleman. Mrs. Palmeri explained to Aleman that she had signed a real estate contract with Respondent on October 6, 2011. She no longer wanted to pursue this real estate transaction and wanted the escrow deposit returned. Aleman was unaware that Respondent was negotiating a real estate transaction for the Palmeris or had accepted their deposit money. Aleman contacted Respondent who confirmed by email that the Palmeris were no longer interested in purchasing the condominium at Blue Lagoon. Respondent wrote, "After a month of hard work . . . the client decided to drop. It was a little bit problematic. I lost time and money because the offer was already accepted and she had no reason to negotiate." Respondent assured Aleman he would return the deposit to the Palmeris. In accordance with Bahia's policies and procedures, its sales associates are required to complete a deposit form at the time of receipt of funds for escrow. No such receipt was received by Bahia from Respondent with regard to the transaction involving the Palmeris. However, it was not unusual for Bahia not to receive information regarding real estate transactions conducted by their sales associates until the time of closing. After discussing the matter with Aleman, Respondent advised the Palmeris that he could return their money within ten days. Respondent advised Mrs. Palmeri that he would send her two checks for the total amount--one check which she could cash immediately and a second check which would be postdated. In order to get a return of their deposit, Mrs. Palmeri agreed. On or about November 28, 2011, the Palmeris received two checks, each in the amount of $6,000.00, including one postdated for December 16, 2011. These checks were written on the account of Bonaventure and signed by Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order imposing on Alfonso Miranda an administrative fine in the amount of $6,000.00 and suspending the real estate sales associate license of Alfonso Miranda for a period of two years. DONE AND ENTERED this 2nd day of April, 2014, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 2014.
Findings Of Fact Respondent Martha M. Bustillo is a real estate broker licensed in the State of Florida, having been issued license number 0401092. At all times material hereto, she has been the qualifying broker for Respondent Virmar Investments, Inc. Respondent Virmar Investments, Inc., is a real estate brokerage corporation licensed in the State of Florida, having been issued license number 0237551. At no time material hereto has Respondent Olga Venedicto been licensed in the State of Florida as either a real estate broker or as a real estate salesperson. In July of 1992 Thomas F. Sevilla contacted Virmar Investments, looking for a house to buy. Olga Venedicto took his phone call and told him that she would help him. Sevilla went to Venedicto's "office" at Virmar Investment and began working with her. Venedicto gave Sevilla her business card which represented that she is the vice president of Virmar Investments, Inc., and carries the notation "registered real estate brokers." In addition to giving him her card which carried her name, Virmar's name, and the word "brokers" in the plural form rather than the singular form, Venedicto specifically told Sevilla that she was a broker. Venedicto and Bustillo took Sevilla to see a house which he decided to buy. He gave Venedicto his check for $2,000 as a deposit and instructed her and Bustillo to make an offer on that house. Venedicto told him she would put the money in Virmar's escrow account. Instead, the money was deposited in Virmar's operating account. Sevilla did not buy that house, and Venedicto and Bustillo took him to see a second house. Sevilla decided not to make an offer on that house and asked Venedicto to refund his money. It took a month before Sevilla received a check from Venedicto. Although the check was marked "deposit return," the check was not written from Virmar's account but rather was a check from a Mega Group Corp. for only $1,675. When Sevilla attempted to cash that check, it was dishonored three times, with the notation "N. S. F." Finally, the check was honored by the bank. Sevilla had expected to receive his entire $2,000 deposit. Neither Venedicto nor Bustillo had ever told him in advance that they would keep part of his money. Although Respondents' attorney during the final hearing implied that his clients may have kept part of Sevilla's money to pay for a survey and credit report, Sevilla had not agreed in advance to pay for a credit report, and no evidence was offered as to what house Sevilla might have purchased a survey on or for what reason. Further, neither Venedicto nor Bustillo gave him a copy of any survey or credit report nor was he ever shown one or advised that either would be obtained. When Sevilla inquired as to why he was reimbursed the lesser amount, only then did Venedicto tell him that Respondents were keeping part of his money for a credit report. Respondents Bustillo and Virmar authorized and assisted Venedicto in her performance of acts and services requiring licensure as a salesperson relative to the transaction with Sevilla. Rita and Carlos Benitez listed their house for sale with Pedro Realty. Gladys Diaz was the listing agent at Pedro Realty. Respondents Bustillo and Venedicto brought Carlos Martinez and his wife to look at the Benitez house. Gladys Diaz was present at the time. Respondents Bustillo and Venedicto subsequently came to Diaz' office and presented to Diaz and Carlos Benitez an offer on behalf of Mr. and Mrs. Martinez. Respondent Venedicto represented herself to be a realtor and Respondent Bustillo to be Venedicto's partner and broker. Respondent Venedicto discussed the contract and price with Diaz and Benitez while Respondent Bustillo observed Venedicto's presentation. The offer had previously been signed on behalf of Respondent Virmar by Respondent Venedicto who represented to Diaz that the signature on the offer was that of Respondent Venedicto. Mr. Benitez signed the document, and Diaz then took the offer to Mrs. Benitez to obtain her signature. Mrs. Benitez also signed the offer, thereby completing the contract. Thereafter, delays ensued because Mr. and Mrs. Martinez were not in a financial position to be able to purchase the home. Respondent Venedicto contacted Mrs. Benitez and attempted to re-negotiate the contract. During those negotiations which were not successful, Respondent Venedicto represented herself to Mrs. Benitez as being a licensed real estate agent. In response to Mrs. Benitez' inquiries, Respondent Venedicto gave Benitez her business card carrying the names of Venedicto and Virmar and the notation "registered real estate brokers." As to the portion of the transaction involving Mrs. Benitez, all of her contact with the three Respondents in this cause was with Respondent Venedicto. Venedicto gave Benitez advice regarding proceeding with the sale and handled the negotiations. Prior to September 24, 1992, Hector F. Sehweret, an investigator for the Department of Business and Professional Regulation, requested that Respondents Bustillo and Virmar produce certain records for inspection by him. He spoke with Respondent Bustillo on a number of occasions to no avail. He offered to give her time to gather the records if necessary, but she never did. On September 24, 1992, he served Respondent Bustillo with a subpoena for those records. She still failed to produce them. Thereafter, she would not return his phone calls, and when he came to the office of Virmar Investments, Respondent Bustillo would hide from him. Neither Respondent Bustillo nor Respondent Virmar have ever produced the records subpoenaed. Further, no explanation has been given for the failure of Respondents Bustillo and Virmar to produce their records. Although the attorney for Respondents implied during the final hearing that the records may have been destroyed by Hurricane Andrew, there is no evidence to support that implication; rather, the evidence is uncontroverted that the building housing the real estate office of Respondents Virmar and Bustillo was not damaged by Hurricane Andrew. Ileana Hernandez is a realtor and a mortgage broker licensed in the State of Florida. She met Respondents Bustillo and Venedicto during a real estate transaction. In November of 1991 Respondents Bustillo and Venedicto contacted Hernandez regarding obtaining money in exchange for a second mortgage on certain real property. At the time, Respondents did not tell Hernandez the identity of the owner of the property, but Hernandez was given the address of the property and was advised that the market value of the property was approximately $79,000. Hernandez was subsequently advised that Respondent Venedicto (a/k/a Olga Bichara) was the owner of the property. It was agreed that Respondent Venedicto would execute and record the promissory note and mortgage in the amount of $15,500. Hernandez, who knew that Respondent Bustillo was the president of Terra Title, gave her a personal check payable to Terra Title in the amount of $15,000 on November 26, 1991. Respondent Venedicto, who had promised Hernandez that the promissory note and second mortgage would be recorded, never recorded those documents. Further, Respondents never delivered the original copy of the promissory note and mortgage to Hernandez despite her repeated demands. Hernandez later discovered that Respondent Venedicto was not the sole owner of the property which she had attempted to mortgage but jointly owned the property with her son. Accordingly, Respondent Venedicto's signature would not be sufficient to perfect a mortgage on the property. Hernandez also discovered that the mortgage, represented by Bustillo and Venedicto to be a second mortgage, was not. There were already two mortgages on the property. Had Hernandez known the true ownership and the true encumbrances on the property, she would not have loaned Venedicto the $15,000 because that raised the total amount of mortgages on the property to be in excess of the value of the property. Three checks which were subsequently written by Respondent Bustillo from the operating accounts of Respondent Virmar and of Mega Group Corp. were dishonored by the bank with the notation "N. S. F." As a result of those checks, Hernandez obtained default final judgments against Respondent Virmar and against Mega Group Corp., which final judgments are still unsatisfied. Prior to that time, however, Respondents Venedicto and Bustillo approached Hernandez regarding their need to borrow $35,000 to be re-paid in 30 days in conjunction with some real estate development in which Respondents Venedicto and Bustillo were involved. Respondent Venedicto and Respondent Bustillo each individually represented that Hernandez would have her money back in 30 days. Respondent Bustillo told Hernandez that Respondent Venedicto was in business with Bustillo and was selling real estate in Mexico. Bustillo asked Hernandez to make the check payable to Bustillo's company Terra Title. Hernandez went to the offices of Respondent Virmar and handed her personal check made payable to Terra Title to Respondent Venedicto. When the 30 days had passed with no payments to Hernandez, she went to Virmar Investments and made Respondent Venedicto sign a promissory note for $35,000. By the time of the final hearing in this cause, Hernandez had recovered only $15,000 of the $35,000 loan made to Respondent Venedicto and had recovered only the principal amount of the money supposed to have been secured by a second mortgage on real property. Hernandez is still owed $20,000 in principal alone.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered revoking the license of Respondent Martha M. Bustillo, revoking the license of Respondent Virmar Investments, Inc., and requiring Respondent Olga Venedicto to pay an administrative penalty in the amount of $5,000 within 30 days from the entry of the Final Order. DONE and ENTERED this 31st day of January, 1994, at Tallahassee, Florida. LINDA M. RIGOT 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 31st day of January, 1994. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 93-3328, 93-3329, and 93-3330 Petitioner's proposed findings of fact numbered 2-18, 20-29, and 31-33 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Petitioner's proposed finding of fact numbered 19 has been rejected as not being supported by the weight of the evidence in this cause. Petitioner's proposed finding of fact numbered 30 has been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 1, 4, 5, 8, 9, 18, 25, 26, 28, 37, 42, 49-52, 55, 57, 62, 63, 69, 71, and 73 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed findings of fact numbered 2, 6, 11-17, 19-22, 30- 36, 43, 46-48, 53, 54, 56, 58, 60, 67 and 68 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Respondents' proposed findings of fact numbered 7, 10, 23, 29, 61, 64, 65, 70, 72, and 75 have been rejected as not being supported by the weight of the evidence in this cause. Respondents' proposed findings of fact numbered 3, 24, 27, 38-41, 44, and 45 have been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 59, 66, 74, and 76-78 are rejected as being irrelevant to the issues under consideration in this cause. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308A Orlando, Florida 32802-1900 Ofer M. Amir, Esquire Amir & Associates, P.A. 8751 West Broward Boulevard, Suite 500 Plantation, Florida 33324 Darlene F. Keller, Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900 Jack McRay, Acting General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Tallahassee, Florida 32399-0792
The Issue Whether Respondent, a real estate broker, committed the offenses alleged in the Administrative Complaint dated February 16, 2010, and, if so, the penalties that should be imposed.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165 and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. At all times relevant to this proceeding, Respondent was licensed in the State of Florida as a real estate broker, having been issued license BK-575099. Respondent is registered as a sole proprietor broker, trading as Atlantic Auction Realty. On February 21, 2008, Respondent, acting through his company, entered into a contract (auction contract) with David Mover to auction a townhouse owned by Mr. Mover located at 8626 S.W. 94th Street, Miami, Florida (the subject property). Mr. Mover had been trying to sell the subject property for approximately two years. In March 2007, Mr. Mover became unable to make the mortgage payments on the subject property. On February 21, 2008, the Circuit Court in and for Dade County, Florida, entered a Final Judgment of Mortgage Foreclosure (Judgment of Foreclosure) against the subject property in favor of Washington Mutual Bank, the holder of the first mortgage. The amount of the judgment was $245,727.25. The Judgment of Foreclosure ordered that the property be sold at public sale on April 24, 2008. At the time of the auction, there was a second mortgage on the subject property owned by a trust. The approximate amount of the second mortgage was $120,000.00. The trust was a defendant in the foreclosure proceedings. Prior to the auction conducted by Respondent, the trustee of the trust indicated a possible willingness on the part of the trust to accept less than the balance owed on the second mortgage if the property were sold by private auction, as opposed to the public auction ordered by the Judgment of Foreclosure. However, the subject auction occurred prior to the trustee’s making a commitment to take less than the balance owed on the second mortgage. The price listed on the auction contract was $350,000.00. The minimum amount Mr. Mover wanted for the townhouse was $370,000.00, which would have been sufficient to satisfy the Judgment of Foreclosure and the second mortgage. Mr. Mover never agreed to accept less than $370,000.00 for the subject property.2 Mr. Mover understood that the $350,000.00 figure was a starting point for the auction.3 This was not an absolute auction. Mr. Mover had the right to refuse a bid less than $350,000.00. The auction contract contained the following provision in paragraph 3: 3. 10% BUYER’S PREMIUM will be added to the Buyer’s Bid and be the Auctioneer’s total commission. The auction contract provided that the auction would be on March 20, 2008. Respondent prepared a flyer that announced the terms of the auction. Prospective bidders were notified by the flyer that a 10% deposit would be required the day of the sale and that there would be a buyer’s premium of 10% of the bid. Prospective bidders were required to have a cashier’s check in the amount of $10,000.00. The “Auction Terms and Conditions” included the following provisions: Bidder Registration. The auction is open to the public and your attendance is welcomed. To register, you must display a cashier’s check in the amount as set forth in each property description. Upon being declared the top bidder, the cashier’s check will be applied as a partial deposit, and the deposit must be increased to equal (10%) [sic] of each contract price. Please be advised there are no exceptions. . . . Contract and Deposit. Bids may not be retracted once accepted by the auctioneer. Upon being declared top bidder, the cashier’s check will be applied as a partial deposit. . . . The auction was conducted in the driveway of the subject property. Mr. Mover waited in the upper area of the subject property during the auction. Mr. Gordon opened the bidding at the base bid (the bid amount prior to tacking on the buyer’s premium) of $285,000.00, but agreed to up the base bid to $300,000.00 when Respondent agreed to reduce the buyer’s premium to $10,000.00 from 10% of the base bid amount ($28,500.00 for a base bid of $285,000.00 or $30,000.00 for a base bid of $300,000.00). Respondent went upstairs and wrote down the amount of the bid and told Mr. Mover that he would reduce the buyer’s premium to $10,000.00 if Mr. Mover would accept that price. Mr. Mover refused to accept that bid. Mr. Mover believed that the auction had failed to sell the property. After talking with Mr. Mover, Respondent concluded the auction by declaring Mr. Gordon, bidding on behalf of himself and his wife, the winning bidder at the auction. Mr. Gordon’s base bid was in the amount of $300,000.00 plus a buyer’s premium in the amount of $10,000.00, bringing the total bid to $310,000.00. After being declared the winning bidder, Mr. Gordon gave to the Respondent the $10,000.00 cashier’s check he had brought to the auction. Mr. Gordon signed a document styled “Contract for Sale and Purchase at Auction” (Purchase Contract), which reflected a total selling price of $310,000.00 (this figure included the buyer’s premium) and a requirement that the closing date be on or before April 19, 2008. The Purchase Contract contained the following provision relating to the Buyer’s Premium: 8. BUYER’S PREMIUM – WHEN EARNED: it is understood and agreed by the Seller and the Buyer that the Buyer’s Premium is paid to the Auctioneer at the time of the Auction Sale and is the sole property of the Auctioneer, and he is entitled to this money as his fee at the time of said payment. Respondent told Mr. Gordon that he would cash the check Mr. Gordon gave to him on March 20, 2008, after Mr. and Mrs. Gordon had an executed contract signed by both parties. Respondent cashed Mr. Gordon’s check on March 21, 2008. Respondent never presented the Purchase Contract to Mr. Mover, and the transaction never closed. The Gordons were unable to secure financing because they had no contract. Mr. Gordon has made repeated demands for the return of the proceeds from the check he gave to Respondent. Respondent has refused those demands.4 Respondent was aware of the foreclosure proceeding before he conducted the auction. Respondent did not disclose the foreclosure proceeding to Mr. Gordon prior to the auction. After the auction, Mr. Mover filed for bankruptcy. Mr. Gordon filed no claim in that proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Division of Real Estate find Respondent guilty of the violations alleged in Counts I and II of the Administrative Complaint. For the violation found in Count I, it is recommended that the final order impose against Respondent an administrative fine in the amount of $1,000.00 and that it revoke his broker’s license. For the violation found in Count II, it is recommended that the final order impose an administrative fine in the amount of $250.00 and that it revoke his broker’s license. DONE AND ENTERED this 14th day of July, 2010, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 2010
Findings Of Fact Horacio A. Sotolongo (Respondent) is, and at all times involved in the Administrative Complaint was, a real estate broker registered with the FREC. Respondent was served with a copy of the Administrative Complaint and requested a hearing on the charges. Thereafter Respondent was notified of the time and place of the scheduled hearing by Registered/Certified Mail sent to the last address registered with the FREC. In May, 1974 Respondent negotiated the sale of a tract of land near Stuart, Florida between Hypoloxo Enterprises, Inc. seller, and Harry Soccorso, buyer. When the buyer was unable to close the transaction Respondent procured another buyer to whom the contract was assigned by the original buyer. Respondent told the seller that the new buyer (Enrique Torres) was the owner of the Florida Lumber Company located in Miami and that Torres could not speak English. The property was deeded to Torres in accordance with the contract. Subsequent thereto Torres became delinquent in his mortgage payments and quitclaimed the property back to the seller in satisfaction of the mortgage. At no time was Torres more than an employee of Florida Lumber Company and he owned no stock and held no corporate office in this company. Torres is fluent in English and was so fluent at the time of the transaction. On August 29, 1974 Respondent produced a potential buyer for property owned by Ft. Pierce Sand and Minerals, Inc. and presented an offer to purchase the property for $150,000 under terms specified in the offer. Although the contract recited an earnest money deposit by buyer of $5,000, only $2,500 was received by Respondent. The offer was not accepted by the seller and buyer demanded return of his deposit. Upon receipt of the check representing the earnest money deposit Respondent did not deposit it in his escrow account but cashed the check at the First National Bank and Trust Company of Tequesta on which the check had been drawn. At the time of receipt of the $2,500 deposit Respondent's escrow account balance was zero and there has been no activity in the account since that time. The $2,500 deposit was returned to the buyer some two months after the offer had been refused by the seller.
