The Issue Whether Respondents violated Subsections 475.25(1)(b),(e), and (q), Florida Statutes, and Rules 21V-10.033, 21V-14.012(2) and (3) and 21V-14.014, Florida Administrative Code.
Findings Of Fact Respondent, Rhoda Kurzman (Kurzman), is currently and was at all times relevant to this proceeding a licensed real estate broker in this state. Respondent, Security Realty Investments, Inc. (Security), is currently and was at all times relevant to this proceeding a licensed real estate broker corporation in this state. Security is a small company which deals primarily with the property management of its own properties. Ms. Kurzman is the president of and broker for Security. In April, 1992, Respondents came up for a routine audit. Joseph L. Wilson, then an investigative auditor for Petitioner, Department of Professional Regulation (DPR), conducted an office inspection and escrow/trust account audit on April 14, 1992. The inspection and the audit were in four areas: 1) office 2) required office sign 3) agency disclosure and 4) broker's records, including reconciliation statements and escrow/trust accounts. Respondents maintained a trust account in an interest bearing savings account with County National Bank of South Florida. Respondents received quarterly statements from the bank. As part of the audit, Mr. Wilson asked Ms. Kurzman to produce the reconciliation statements for Security's escrow/trust account. She gave him a running journal (Pet. Exhibit 2) which she had prepared in her own handwriting. The journal was entitled " Escrow Account # 0120056458-20, County Bank, Miami, Florida 33164." There were entries beginning June 29, 1988 through December 31, 1991. The dates listed on the left side of the journal represented the dates for either deposits or withdrawals. The last deposit in the account other than interest was on March 20, 1991. There were double check marks on the right side which represented the amounts reconciled with the bank statements. The entire document contained five double check marks. Petitioner's Exhibit 2 does not reflect the dates the reconciliations took place. Petitioner's Exhibit 2 was not signed and dated by Ms. Kurzman each time the account was reconciled. Petitioner did not reconcile the account on a monthly basis. The bank statement for the period ending December 31, 1991 showed a balance of $375.54, as did the balance in the December 31, 1991 entry of the journal. The bank statement for the period ending March 31, 1992 showed a balance of $379.83. Respondents did not have any escrow security liability on these dates; thus these balances represented overages in the escrow account. Petitioner's Exhibit 2 did not contain a description or explanation for the overages. Mr. Wilson discussed the overages with Ms. Kurzman, and she indicated that the balance in the bank account resulted from accumulated interest from 1988. Mr. Wilson advised her that prior to March, 1992, an escrow account could carry an overage of only $100, but that after March 1992, overages of up to $200 could be carried in escrow accounts. Ms. Kurzman agreed to withdraw sufficient funds from the account to bring it in compliance with the allowed overage. By letter dated April 14, 1992, Ms. Kurzman advised Mr. Wilson that she had withdrawn $300 from the escrow account, bringing the balance to $79.83, and included a copy of the withdrawal slip with the letter. All the sales made by the Respondents are listed in the journal maintained by the Respondents. There have been eight sales since 1988. Some of the transactions did not result in a contract. From September 1, 1991 through October 1, 1992, Mr. Wilson conducted approximately 300 audits, 40 of which were done during the month of April, 1992. The audit of Respondents was approximately two to four hours long. Ms. Kurzman produced one sales contract during the audit, the other contracts were stored in a different location. During the audit, Mr. Wilson prepared an Office Inspection and Escrow/Trust Account Audit Form, which he and Ms. Kurzman signed. After the audit he prepared an investigative report. No specific transactions were mentioned in either document. Mr. Wilson destroyed the specific notes or tic sheets that he made during the audit. At hearing he admitted that if someone showed him one of the contracts for the transactions appearing in the journal, he would not be able to recall if he had looked at the contract during the audit. Ms. Kurzman specifically recalls the audit and her recollection of the audit is much clearer than Mr. Wilson's. At hearing Mr. Wilson was unable to recall specific transactions dealing with the alleged failure to disclose that escrow funds were being placed in an interest bearing account. He believes that they discussed names of contracts or types of situations, but can't recall because of the length of time that had passed since he performed the audit. Ms. Kurzman specifically recalls that other than the transaction in which she was the seller they only discussed one sales contract. He believes that Ms. Kurzman said that she had made oral disclosure in some but not all transactions in which there were principals other than the broker, and that there were no written disclosures. In one of the sales listed in the escrow account journal, Ms. Kurzman was the seller and had divested herself as broker during that transaction. In the Baldoria transaction, the contract required that Ms. Baldoria receive interest and the interest was paid to her. Obviously there was disclosure to Ms. Baldoria, and it appears that the disclosure was in writing. Ms. Kurzman and Mr. Wilson discussed the issue of the disclosure of interest bearing accounts during the audit. There was a disagreement between them as to when such disclosure had to be made. Having judged the credibility of the witnesses and in particular having considered Mr. Wilson's difficulty in recalling specifics of the audit, I find that the evidence is insufficient to conclude that the Respondents failed to disclose that escrow/trust funds were being placed in an interest-bearing account. Mr. Wilson was unable to recall any contracts in which Respondents were alleged to have failed to make agency disclosure. There have been no prior audits of Respondents. No prior disciplinary actions have been taken by Petitioner against Respondents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Counts I, II, V, VI, VII, and VIII of the Administrative Complaint, finding Respondents guilty of violating Rule 21V-14.012, Florida Administrative Code and Section 475.25(1)(e), Florida Statutes, reprimanding each Respondent, imposing against Rhoda Kurzman an administrative fine of $100, and requiring Rhoda Kurzman to provide within six months after the date of the Final Order satisfactory evidence to the Florida Department of Business and Professional Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completed a 30-hour postlicensure broker management course. DONE AND ENTERED this 20th day of January, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 20th day of January, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5542 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact Paragraphs 1-6: Accepted in substance. Paragraph 7: Rejected as not demonstrated by clear and convincing evidence. Paragraph 8: Accepted. Respondent's Proposed Findings of Fact Paragraph 1: Accepted. Paragraphs 2-3: Rejected as subordinate to the facts actually found. Paragraph 4: Accepted in substance. Paragraph 5: Rejected as subordinate to the facts actually found. Paragraphs 6-7: Accepted in substance. Paragraph 8: Accepted in substance. Paragraph 9: Accepted. Paragraph 10: Accepted in substance. Paragraphs 11-13: Accepted. Paragraphs 14-19: Rejected as subordinate to the facts actually found. Paragraphs 20-26: Accepted in substance. Paragraph 27: Rejected as not supported by the evidence. Paragraph 28: Accepted in substance. Paragraph 29: Rejected as subordinate to the facts actually found. Paragraph 30: Accepted. Paragraph 31: Rejected as subordinate to the facts actually found. Paragraph 32: Accepted. Paragraphs 33-34: Rejected as subordinate to the facts actually found. Paragraphs 35-37: Accepted in substance. 20 Paragraphs 38-40: Rejected as subordinate to the facts actually found. COPIES FURNISHED: Michael J. Kurzman, Esquire Grand Bay Plaza, Suite 702 2665 South Bayshore Drive Coconut Grove, Florida 33133 Theodore Gay, Senior Attorney Department of Business and Professional Regulation Division of Real Estate 401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128 Darlene F. Keller Divison Director 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay Acting General Counsel Department of Business Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399
The Issue Whether or not Respondents' registration as real estate brokers should be suspended for an alleged violation of Section 475.25(1)(i), Florida Statutes.
Findings Of Fact On or about the middle of March, 1974, Anne Land, a saleswoman for Respondent real estate brokers, met one Timothy B. Howe who had responded to an advertisement in the newspaper concerning the purchase or lease of a home at 185 West Sunrise Avenue, Coral Gable, Florida. After viewing the premises, Mr. Howe decided to lease the property and his attorney prepared a lease in the total sum of $7,200 for one years rent. This proposal was submitted to the owner of the house, Mrs. Joanne Kealy, but upon the advice of counsel, she declined the proposal. Several days later, Howe decided to purchase the home. He signed a standard sales contract, dated March 26, 1974, which provided for a total purchase price of $72,500.00, payable under the following terms: "The sum of $1,800.00 by check hereby deposited in escrow with Magruder Realty, Inc., as escrow agent, in part payment of the purchase price and as a security deposit for the faithful performance of this contract by Purchaser, and the remainder of the purchase price shall be paid as follows: Upon acceptance of this contract the purchaser to deposit with Magruder Realty, Inc., an additional $5,400.00. Purchaser to assume existing mortgage for approx. $38,816.00 with Coral Gables Federal Svgs and Loan Association and the seller to give to the purchaser a second mortgage for balance of approx. $26,500.00 at 8 1/2 percent for 12 years or less with no pre-paid clause penalty..." The contract was signed by Land as witness and also in behalf of the seller and also as an escrow agent of Magruder Realty, Inc. The document was not acknowledged before a notary public (testimony of Lands Petitioner's Exhibit 1). Land contacted the owner who was out of state at the time and asked her to indicate her acceptance of the offer by telegram. The owner did so on March 29, 1974. The evidence is conflicting as to the circumstances surrounding the disposition of the deposit check for $1,800.00. Land testified that she gave the check to Joseph P. Magruder on March 26 or 27 as was her practice in handling deposits, but said nothing about holding the check. Mr. Magruder, on the other hand, testified that at the time she gave him the check, she said Mr. Howe desired the check be held until the total down payment of $7,200.00 was received from a trust account, and that he therefore put the check in the transaction folder and gave the folder back to her to retain. His statement of the reason for not depositing the check in an escrow account immediately is supported by subsequent events and by the fact that the check was not actually deposited until a subsequent date, which was contrary to his normal office practice (testimony of Land, Magruder, O'Brien; Exhibit 2). Subsequent conversations between Land and Howe during the latter part of March and early April were to the effect that Howe's mother was sending funds for the balance of the down payment. On April 4, Land talked to Howe by telephone and he asked for the escrow account number of Magruder Realty, Inc., in order that his mother could send the additional $5,400.00 and/or $7,200.00. Land asked Respondent O'Brien, who was in the office at the time, for the firm's escrow account number and passed it on to Howe. On the same day, Land went on vacation in North Carolina and did not return to the office until April 15th. At that time, Magruder informed her that the additional funds had not been received from Howe and that although he had tried to reach him on the telephone he had been unsuccessful. Because of the difficulty in reaching Howe as to payment of the balance of the down payment, Magruder deposited the $1,800.00 check in his escrow bank account on April 17, 1974. It was not honored by the Howe's bank because Cristina I. Howe, his wife, had issued a stop payment order on the check on April 15. On March 26, 1974, the date the check was drawn, the Howe bank account was overdrawn by 26 (testimony of Land, Magruder, O'Brien, Garcia; Petitioner's Exhibits 2 & 6; Respondent's Exhibit 1). Although Respondents claimed that the Florida Real Estate Commission had disposed of the instant allegation by its letter of censure dated February 10, 1975, which referenced file CD15240, it was determined by the Hearing Officer that this letter involved other transactions and not the one under consideration at the hearing (Petitioner's Composite Exhibit 5).
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint? If so, what disciplinary action should be taken against her?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Department is a state government licensing and regulatory agency. Respondent is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida holding license number 0005609. She is 72 years of age. The money she earns as a real estate broker helps to supplement her retirement income. In the almost 40 years that she has been broker, the only complaint that has been made against her in connection with the practice of her profession is the complaint that is the subject of the instant case. Peter Rettig is a longtime acquaintance of Respondent's. He too is a Florida real estate broker. Rettig is the operating and qualifying broker for La Costa Real Estate, Inc. In September of 1993, as a favor to Rettig, Respondent agreed to act, without compensation, as Rettig's escrow agent. Thereafter, Rettig deposited trust funds received from his buyer/clients in the "Mary A. Belotto Escrow Account" (account number 3431110272) that Respondent had established at Barnett Bank. On various occasions from September of 1993, to July of 1994, Respondent, unthinkingly, appropriated a portion of these funds for her own personal use, but acted swiftly to replace the appropriated funds with her own personal funds. As a result, no one was actually harmed by her actions. During this period of time, Respondent was suffering from severe emotional distress and a resulting inability to think clearly due to the death of her husband and the subsequent death of a close friend who had provided her with needed assistance and support following her husband's death. On January 18, 1995, Edward Gruskin, an investigator with the Department, conducted an office inspection/audit of La Costa Real Estate, Inc. and the "Mary A. Belotto Escrow Account." The inspection/audit revealed that Respondent had engaged in the conduct previously described in Finding of Fact 11 of this Recommended Order and that, in addition, she had failed to prepare and sign monthly reconciliation statements for her escrow account. Respondent now realizes that she erred in engaging in such conduct and in failing to prepare and sign these reports. She has apologized for making these errors and has promised, with apparent sincerity, not to repeat them in the future.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby RECOMMENDED that the Commission enter a final order finding Respondent guilty of the violations alleged in the Administrative Complaint and fining her $250.00, issuing her a reprimand, and placing her on probation for a period of three years for having committed these violations. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 14th day of September, 1995. STUART M. LERNER 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 September, 1995. APPENDIX TO RECOMMENDED ORDER The following are the Hearing Officer's specific rulings on the findings of fact proposed by the parties in their proposed recommended orders: The Department's Proposed Findings 1-2. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. 3. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 4-5. Accepted and incorporated in substance, except for 5c. and 5d., which have not been incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer. Respondent's Proposed Findings First unnumbered paragraph: To the extent that this proposed finding states that Respondent is 72 years of age and has been a real estate broker in the State of Florida for almost 40 years, it has been accepted and incorporated in substance. Second unnumbered paragraph: Accepted and incorporated in substance. Third unnumbered paragraph: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. Fourth and fifth unnumbered paragraphs: Accepted and incorporated in substance. Sixth unnumbered paragraph: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. Seventh unnumbered paragraph- First sentence: Accepted and incorporated in substance; Second sentence: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. COPIES FURNISHED: Daniel Villazon, Esquire Senior Attorney Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mary A. Belotto 1571 Southeast 23rd Avenue Pompano Beach, Florida 33062 Henry M. Solares, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Both Ryder and Disney World are self-insurers as defined by Section 440.38, Florida Statutes (1979). If the proposed rules were adopted both parties would be liable for assessments required by the rules.
Findings Of Fact Petitioner is an agency of the State of Florida charged with the responsibility and duty to prosecute violations of the statutes and rules regulating the practice of real estate in the State of Florida. Respondent, Benjamin C. Rolfe, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0318091 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Rolfe was as a broker with Squires Realty of the Palm Beaches, Inc., 721 U.S. 1, #217, North Palm Beach, Florida. Respondent, Duane C. Heiser, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0038233 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Heiser was as a broker effective February 8, 1991, at Duane C. Heiser Realty Co., 1312 Commerce Lane A1, Jupiter, Florida. On or about December 12, 1998, a Final Order was issued by the Florida Real Estate Commission and received by Mr. Heiser whereby his real estate broker's license was suspended for two (2) years from January 12, 1989, through January 10, 1991. During the month of October 1989, Mr. Heiser violated the lawful suspension order of the Commission by personally delivering rental checks to and ordering the disbursement of escrow funds from the Property Management-Operating Account, which is an escrow account, of Squire's Realty Company of the Palm Beaches, Inc. Between March 22 and March 26, 1990, the escrow account records of Mr. Rolfe, who was the qualifying broker for Squire's Realty of the Palm Beaches, Inc., were audited by Petitioner's authorized representatives. The Escrow/Trust Account Audit revealed that Respondent Rolfe failed to properly document and reconcile the Property Management-Operating Account, which is an escrow account. Mr. Rolfe was responsible for this account. Mr. Rolfe was negligent regarding the management of this escrow account by allowing a suspended licensee, Mr. Heiser, access to this account. Mr. Rolfe and Petitioner stipulated that the appropriate penalty for Mr. Rolfe's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation Mr. Rolfe would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Rolfe would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Rolfe to remain active and current as a real estate broker in the State of Florida. Mr. Heiser and Petitioner stipulated that the appropriate penalty for Mr. Heiser's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation, Mr. Heiser would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Heiser would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Heiser to remain active and current as a real estate broker in the State of Florida.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which: Dismisses Counts I, III, and V of the Administrative Complaint; Finds Mr. Heiser guilty of having violated a lawful order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), Florida Statutes, as alleged in Count II of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Heiser and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Heiser pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Heiser be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Heiser to remain active and current as a real estate broker in the State of Florida. Finds Mr. Rolfe guilty of culpable negligience in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, as alleged in Count IV of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Rolfe and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Rolfe pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Rolfe be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Rolfe to remain active and current as a real estate broker in the State of Florida. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 30th day of December, 1991. 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 30th day of December, 1991. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Neil F. Garfield, Esquire Garfied & Associates, P.A. World Executive Building Suite 333 3500 North State Road 7 Fort Lauderdale, Florida 33319 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
The Issue Whether or not Respondents' Florida real estate licenses should be disciplined for violation of Section 475.25(1)(b) F.S., by dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction; Section 475.25(1)(d)1. F.S., failure to account for or deliver funds; Section 475.25(1)(k) F.S., failure to maintain trust funds in their real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized; and Section 475.25(1)(e) and Rule 61J2-10.032(1) F.A.C. for failure to provide written notification to the Real Estate Commission upon receiving conflicting demands within 15 business days of the last party's demand or upon a good faith doubt as to who is entitled to any trust funds held in the broker's escrow account and failure to institute one of the settlement procedures as set forth in Section 475.25(1)(d)1., F.S. within 15 business days after the date the notification was received by the Division.
Findings Of Fact Petitioner is the state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular, Section 20.165, F.S., Chapters 120, 455, and 475, F.S. and the rules promulgated pursuant thereto. The Respondent Norman Rivers, Jr. is and was at all times material hereto a licensed real estate broker, issued license number 0189212 in the accordance with Chapter 475, F.S. The last license issued was as a broker c/o Route 1, Box 344, Alachua, Florida 32615. Respondent Norman Rivers Jr., Realty, Inc. is and was at all times material hereto a corporation registered as a Florida real estate broker having been issued license number 0214407 in accordance with Chapter 475, F.S. The last license issued was at the address of Route 1, Box 344, Alachua, Florida 32615. At all times material hereto, Respondent Norman Rivers, Jr. was licensed and operating as qualifying broker and officer of Respondent Norman Rivers Jr., Realty, Inc. On December 5, 1994, Respondent showed Charles E. and Elizabeth A. Smith (husband and wife) a tract of land located in Dixie County, Florida. Afterward, Respondent Norman Rivers, Jr. sent a $57,500 offer to Charles E. Smith for his signature. On December 7, 1994, Mr. Smith signed the offer and forwarded it with a $2,875 deposit to the Respondents. The next day, the Seller, Ed Dix, accepted the Smiths' offer. The contract provided that if the deal did not close on December 23, 1994, "...if the said Buyer fails to perform the covenants herein contained within the time specified, therefore said deposit made by the Buyer may be forfeited at the option of the Seller, as liquidated damages, upon 10 days' notice to the Buyer, and one half thereof shall be retained by or paid to said Realtor and the remainder to the Seller, unless because of expense incurred the latter shall agree or had agreed in writing to a greater percentage being paid to the Realtor,..." The property sale did not close on December 23, 1994. At some point in time, Mr. Smith conversed with Respondent Rivers by telephone and told him he could not afford to purchase the property since a greater amount would have to be financed and because his wife could not be persuaded to go through with the deal. He told Mr. Rivers that he would like Mr. Rivers to return any amount remaining in excess of Mr. River's expenses but that Mr. Rivers could retain his expenses. Mr. Rivers told Mr. Smith that his expenses had used up the entire $2,875 binder. Mr. Smith accepted this representation. He testified that he "considered the issue closed" at that point. Neither Mr. or Mrs. Smith made subsequent demands for all or part of the binder. The administrative complaint herein was urged quite some time later by Mrs. Smith. The Respondents affirmatively demonstrated that Mr. Rivers' business practice from 1991 to 1995 and continuing to date, is to promptly refund deposits upon a Buyer's request, if the Seller agrees. The significance of this evidence is that if a clear demand for refund or audit had been made by Mr. Smith, Respondents probably would have made some accounting and refund. In this case, Mr. Rivers did not do so because he did not consider that he had a clear- cut request to refund a deposit. Despite Mr. Smith's testimony that his final telephone conversation with Mr. Rivers as related above in Finding of Fact 11, occurred before Christmas 1994 and Mrs. Smith's deposition testimony that Mr. Smith's and Mr. River's phone conversation occurred on December 21, 1994, before the agreed closing date all other documentary evidence and credible testimony points to the conversation occurring in mid-January 1995. The parties stipulated that on 12/21/94, Alachua County Abstract Company sent the closing package by UPS overnight delivery to Mr. and Mrs. Smith. This package was received by Mr. and Mrs. Smith on 12/22/94. The significance thereof is that Mrs. Smith testified that the telephone call made by her husband in her presence from their home to Mr. Rivers cancelling the contract and demanding the return of their deposit occurred the night before the day they received the closing package, or December 21, 1996. However, the Smiths' long distance telephone records from 12/7/94 to 1/31/95 reveal that no long distance call was made from the Smith home to Mr. Rivers on 12/21/94 or any date other than 12/7/94, the day Mr. Smith initially signed and faxed the contract to Mr. Rivers. It is noted that at one point Mr. Smith wobbled and testified that Mr. Rivers telephoned him for the final phone conversation at some time prior to Christmas 1994. This is contrary to Mrs. Smith's testimony and Respondents' telephone records do not show that Mr. Rivers telephoned the Smith home on December 21, 1994, either. Between 12/30/94 and 01/17/95, Respondents' long distance telephone bills show charges for 15 calls to Mr. Smith's several work phone numbers and the home phone number. In Mr. Rivers' words, "I chased him like a hound," to find out what was going on, including when the deal could close. This demonstrates Mr. Rivers' continued belief after December 21, 1994 that the contract was still going to close and contradicts Mrs. Smith's testimony that Mr. Smith had orally cancelled the contract and demanded the return of his deposit on December 21, 1994. It further contradicts Mr. Smith's testimony this conversation occurred sometime before Christmas, 1994. The agency stipulated that Seller Dix and Norman Rivers, Jr. entered into an agreement whereby any binder forfeiture resulting from the Smiths' failure to close on December 23, 1994 would be used by Norman Rivers, Jr. and Norman Rivers, Jr. Realty, Inc. to cover their expenses incurred in marketing Mr. Dix's property. Respondents established that prior to the contract signing on December 7, 1994, they had expended at least $3,339.00 in advertising in order to market and sell Mr. Dix's property. There is no evidence Mr. Smith ever objected to paying the advertising costs incurred by Respondents or even inquired what Mr. Rivers' expenses were. Mr. Rivers did not remove any amount related to Mr. and Mrs. Smith from his escrow account before January 16, 1995. Then he did so by three checks made out to Norman Rivers Jr. Realty, Inc. Mr. Smith and Mr. Rivers concur that Mr. Smith made no specific demand for an audit of Respondents' expenses. Real Estate Commission Investigator Russell Lambert audited Respondents' accounts. He testified he "found no violations."
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the administrative complaint herein. RECOMMENDED this 2nd day of December, 1996, at Tallahassee, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 1996. COPIES FURNISHED: Steve W. Johnson, Esquire Department of Business & Professional Regulation 400 West Robinson Street, Suite N-308 Orlando, Florida 32801-1772 James F. Gray, Esquire Post Office Box 7100 Gainesville, Florida 32605 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Respondent was at all times material to this proceeding a licensed real estate broker in the state of Florida having been issued license number 0035275. The last license issued was as a broker, d/b/a Silver Springs Real Estate, Corp., 4121 East Silver Springs Boulevard, Ocala, Florida 32671. On or about August 3, 1984, the Respondent obtained Teri L. Lochman (Lochman) as a tenant of certain residential property belonging to Gail and Valerie Cox (Cox) that was involved in a sale to A. Pillot. In connection with this sale, a lease had been prepared between A. Pillot as Lessor and A. Alongi as Lessee. Lochman signed this lease as Lessee, and in connection with this lease, paid Respondent $1,600.00 representing $700.00 for the first month's rent, $700.00 for the last month's rent and $200.00 security deposit. These funds were paid by Lochman to Respondent in two separate checks in the amount of $500.00 and $1,100.00 dated August 5, 1984 and August 13, 1984, respectively. The Pillot/Cox escrow account, which had previously been established in Respondent's escrow ledger, was credited with these funds and the funds deposited in Respondent's real estate brokerage trust bank account, No. 805 0006583, in the Sun Bank of Ocala (Trust Account), on August 9, 1984 and August 17, 1984, respectively. Upon attempting to move into the home she had rented, Lochman discovered that Cox was still in possession because the sale had not gone through. At this point, August 17, 1984, Lochman and Cox signed an agreement which would allow Lochman to reside in the home rent free for two weeks while Cox was out of town in return for acting as a security guard. Sometime after the August 17, 1987 agreement was executed by Lochman and Cox, Lochman and Cox signed a handwritten month to month lease of the premises requiring Lochman to pay Cox $700.00 for the first month's rent, $700.00 for the last month's rent and a $200.00 damage deposit. This payment was conditioned upon Lochman receiving her refund from the Respondent. There was no credible evidence that Respondent agreed to release Cox from any previous agreement with Respondent wherein Respondent acted as agent for Cox in obtaining Lochman as a tenant or the handling of Cox's property, i.e. mowing grass or preparing house for rent. Additionally, there was no credible evidence that Respondent agreed to Lochman dealing directly with Cox. Respondent was at all times relevant to this proceeding acting as agent for Cox, and therefore, demanded from Cox her commission for obtaining Lochman as a tenant and reimbursement for other services rendered before returning Lochman's rental deposit. There is no credible evidence that the Respondent agreed to return Lochman's rental deposit without first obtaining her commission or reimbursement for other services rendered from Cox. There is no credible evidence to show that Cox paid Respondent her commission or reimbursed Respondent for other services rendered or that Cox made a demand on Respondent to pay the Lochman rental deposit to Lochman. There is credible evidence that Lochman made a demand on Respondent for the return of her rental deposit and that Respondent refused to return Lochman's rental deposit because there was a dispute between Respondent and Cox concerning Respondent's commission and reimbursement for other services rendered. Lochman did not pay Cox the rent for the month of September, 1984, therefore, she contends that Respondent only owes her $900.00 of the rental deposit. Upon Respondent's refusal to pay her the balance of the rental deposit, Lochman obtained a default judgment for $900.00 in civil court, however, and although the record is not clear, the default judgment may have been set aside. (See transcript, page 15, lines 9-13). The evidence is clear that check no. 257 drawn on the Trust Account in the amount of $1,465.00, paid on April 18, 1985, included $1,278.00 from the Pillot/Cox escrow account and depleted the funds in the Pillot/Cox escrow account. However, there was no evidence presented to show that the Lochman rental deposit was paid to Respondent. Likewise, there was no evidence presented to show that Cox did not receive the Lochman rental deposit. There was no evidence presented to show the payee on Check No. 257, or any other check, drawn on the Trust Account. There was no evidence presented to show that Respondent commingled trust funds and personal funds in the Trust Account in regard to deposits and withdrawals. There was insufficient credible evidence to show that Lochman was entitled to delivery of $900.00 or any funds from the Trust Account. There was no evidence that Respondent notified the Real Estate Commission (Commission) of the conflicting demands on the Lochman rental deposit or followed any of the procedures set forth in the statutes to resolve such a conflict.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Commission enter a Final Order finding the Respondent guilty of failing to notify the Commission of the conflicting demands on the trust funds and failing to follow the procedures set forth for resolving such conflict in violation of Section 475.25(1)(d), Florida Statutes and that Respondent's real estate broker's license be suspended for a period of six (6) months, stay the suspension, place the Respondent on probation for a period of six (6) months under the condition that the issue of conflicting demands on the trust funds be resolved within sixty (60) days and under any other conditions the Commission feels appropriate, and assess an administrative fine of $300.00 to be paid within sixty (60) days of the date of the Final Order. It is further RECOMMENDED that the Final Order DISMISS Counts I, III, IV and V of the Administrative Complaint filed herein. Respectfully submitted and entered this 1st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 1st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2387 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 in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner 1.-2. Adopted in Finding of Fact 1. 3. Adopted in Findings of Fact 8 and 9. 4.5 Rejected as not supported by substantial competent evidence in the record. Additionally, Petitioner has treated certain facts in this case as background in unnumbered paragraphs which I have numbered 6-10. Adopted in Finding of Fact 2 as clarified. Adopted in Finding of Fact 4 except for the phrase that Respondent agreed to the return of the rental deposit which is rejected as not being supported by substantial competent evidence in the record. I did not find Lochman's testimony credible in this regard. Adopted in Findings of Fact 8 and 9 as clarified. Adopted in Finding of Fact 10 as clarified. This paragraph is a statement of Lochman's testimony and not presented as a fact, therefore, is rejected. Rulings on Proposed Findings of Fact Submitted by the Respondent For the reasons set forth in the Background portions of this Recommended Order, there has been no rulings of Respondent's Proposed Findings of Fact. COPIES FURNISHED: Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jeffrey J. Fitos, Esquire Valley Forge Military Academy Wayne, Pennsylvania 19087
The Issue Is Respondent, Peter H. Myers, guilty of the allegations contained in the Administrative Complaint issued by Petitioner and, if so, what is the appropriate penalty.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. Respondent Myers is a licensed real estate broker, having been issued license number BK-0646846. Ocean Village Sales & Rentals, Inc. (Ocean Village) is a real estate broker corporation and Respondent is the qualifying broker for said corporation. Background Petitioner and Respondent were involved in earlier disciplinary cases in 1998 and 1999. On or about December 7, 1999, Petitioner and Respondent entered into a Stipulation which resolved DBPR Case Nos. 98-81236 and 99-80423. The Stipulation placed Respondent on probation for a period of one year from the effective date of the Final Order of the Florida Real Estate Commission (FREC), which adopted the stipulation and was issued on or about January 19, 2000. The Stipulation read in pertinent part as follows: Respondent agrees not to hold or maintain any escrow, trust or real estate related escrow or trust funds for the one(1) year probationary period. Respondent is permitted to be a signatory on the operating and payroll accounts for his brokerage firm only. Respondent shall place all escrow, trust or real estate related funds with a title company, attorney, or other proper depository as permitted under Chapter 475, Fla. Stat., and Fla. Admin. Code r. 61J2. Respondent further agrees not to be a signatory on any escrow, trust or real estate related account with the exception of the operating and payroll accounts for his brokerage firm for the one (1) year probationary period. In compliance with the terms of the stipulation, Respondent placed his escrow account with Joseph Roth, a certified public accountant and licensed real estate broker in the State of Florida. In the Stipulation, Respondent admitted to, among other things, failure to prepare the required written monthly escrow statement reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Section 475.25(1)(e), Florida Statutes. Escrow accounts audit Gail Hand is an Investigation Specialist II with the Department of Business and Professional Regulation (the department). She has approximately 16 years of regulatory and investigative experience with the department. When she started working with the department, she conducted from 20 to 30 trust account audits per month. She routinely conducts audits and inspections of the records of real estate brokers. When reviewing escrow accounts, Ms. Hand's review of escrow accounts has two components. First, she reviews the bank statement reconciliations which compares the statement balance to the checkbook balance. Next she reviews a comparison of the bank statement reconciliations with the broker's total trust liability. The broker's total trust liability is the total of all the money that the broker is holding in his trust or escrow account. On or about January 26, 2001, Ms. Hand conducted an office inspection and escrow account audit of Respondent's business, Ocean Village. Respondent and his daughter were present. During this inspection and audit, Ms. Hand requested to inspect financial documents of the company. Respondent and his daughter provided all documents requested and were very cooperative during the course of the audit. Ms. Hand inspected the November and December 2000 bank reconciliation statements from the escrow trust account of Ocean Village and determined that they were properly prepared. However, Ms. Hand determined that the determination of the broker's trust liability was not properly prepared in that she could not identify the broker's total trust liability from a review of the documents provided by Respondent. The calculations in Respondent's financial records included broker's money, bank fees, and negative owner balances. According to Ms. Hand, the reconciled checkbook to bank statement balance should be compared to a balance that does not include broker's money, bank fees or negative owner balances. Because of this, she could not identify the total broker's trust liability. She normally does not have trouble identifying a broker's total trust liability when conducting an audit. During the audit, Respondent could not identify the total broker's trust liability. Respondent deferred to his accountant, Mr. Roth. Ms. Hand did not discuss the financial documents which she reviewed as part of the audit with Mr. Roth because, "Mr. Myers was responsible." License renewal Respondent's renewal fees for his corporate registration and his individual broker's license became due in March 1999. Respondent renewed his corporate registration in March 1999 but failed to renew his individual broker's license. Respondent did not renew his individual broker's license until February 2001. At that time, he paid for the time period in which he was in arrears and for another 24 months in the future, as well as a late fee or penalty. Respondent continued to conduct real estate transactions during the period of time that his individual broker's license was in involuntary inactive status.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, the evidence of record and the demeanor of the witnesses, it is RECOMMENDED: That a final order be entered by the Florida Real Estate Commission finding the Respondent, Peter H. Myers, guilty of violating Sections 475.25(1)(e) and (o), and 475.42(1)(a), Florida Statutes, and imposing a fine of $2,500.00. DONE AND ENTERED this 4th day of September, 2002, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 4th day of September, 2002.
