The Issue The issues are whether Respondents failed to comply with the requirements of keeping and producing records, committed fraud in any business transaction, and, if so, the penalty.
Findings Of Fact Respondent Noel D. Clark, Jr. (Clark), has been a licensed real estate broker at all material times. From August 24, 1994, through November 9, 1997, he was the qualifying broker for ABC Brokers, Inc. From November 10, 1997, through April 21, 1998, Clark was the qualifying broker for Respondent ABC Home Brokers, Inc. (ABC). From April 22, 1998, through the present, Clark has been an individual real estate broker. ABC was a licensed real estate brokerage corporation from November 10, 1997, through April 21, 1998. Since April 22, 1998, ABC has not held a valid registration due to the lack of a qualifying broker. Respondent Betsy L. Brennan (Brennan) has been a licensed real estate salesperson since December 8, 1997. From December 8, 1997, through April 13, 1998, she was a salesperson under ABC. Since April 14, 1998, Brennan has been a licensed real estate salesperson under Clark. At all material times, Patricia and Lauren Hanson owned a mobile home located on a rented lot in North Fort Myers. By a listing agreement entered into in October 1996, the Hansons listed the home for sale with ABC. The listing price was $34,500 cash. Charles and Cynthia Harvey contacted Brennan and expressed an interest in purchasing the mobile home. They told Brennan that they were interested in buying a home after they sold Mr. Harvey's 1977 Ford dump truck. Brennan and Clark showed them several mobile homes. The Harveys decided that they wanted to purchase the Hansons' home. Brennan told the Harveys that she, as Trustee of the Driftwood Family Trust, would sell them the mobile home after buying it from the current owner. Most of the beneficiaries of the Driftwood Family Trust are related to Clark or Brennan. On December 4, 1997, Brennan, as Trustee of the Driftwood Family Trust, as purchaser, executed an ABC dealer order form to purchase the Hansons' mobile home for $28,000, which with tax and miscellaneous items rose to $30,430. On December 6, 1997, Brennan, as Trustee of the Driftwood Family Trust, as purchaser, executed an Agreement and Promissory Note reflecting the same purchase price. ABC faxed these materials to the Hansons on or about December 6. On December 5, 1997, Brennan, as Trustee of the Driftwood Family Trust, as seller, and Charles and Cynthia Harvey, as buyers, entered into an Agreement and Promissory Note for the purchase and sale of the Hansons' mobile home. The price was $42,000 with a $12,000 down payment. In the agreement, Brennan, as Trustee, warrants that she is the lawful owner of the property with the right to convey it. For the down payment, the Harveys delivered to Brennan the executed title to the dump truck, which Brennan accepted, somewhat generously given the value of the truck, in full payment of the $12,000 down payment. The delivery of the title certificate did not take place until January 10, 1998, by which time, probably due to her awareness of problems with the deal, Brennan decided not to cause the issuance of a new title in her name. The Harveys began moving into the mobile home on December 6. The evidence is especially vague as to the dealings between Respondents and the Hansons during this period of time. Except for faxing the Driftwood Trust offer to purchase, the record reveals only that, on or about the day that the Harveys moved into her mobile home, Patricia Hanson consented to their doing so. Three or four days later, though, Patricia Hanson's sister visited the Harveys and told them that her sister had not sold the mobile home. The Harveys informed her that they had a binding contract to purchase the mobile home. That evening, the Harveys telephoned Clark. He assured them that everything would work out. However, the Harveys refused to pay on the note, and Clark called them and informed them that he would foreclose. By letter dated January 26, 1998, Brennan, as Trustee, informed the Harveys that the December 5 agreement was "void ab initio" because they had induced the agreement through fraudulent inducements of "their credit and financial situation, employability and job stability." The January 26 letter states that the December 5 agreement was contingent upon Brennan's closing on the mobile home with the Hansons and that the Harveys understood that they were not to disturb the Hansons' property or furnishings until Brennan acquired the property from the Hansons. The January 26 letter states that the Harveys misrepresented to Brennan that they had good credit, that Mr. Harvey earned $42 per hour with the truck, and that Mr. Harvey would earn $15 per hour driving a dump truck for someone else. The January 26 letter states that Brennan has hired an attorney to litigate and "will be entitled to an award of costs and attorney fees since the agreement contains a 'prevailing party' provision which by its nature survives the voiding of the agreement." The December 5 agreement contains a provision for attorneys' fees, although the provision does not appear to survive its voiding. In any event, the Harveys made no representations in the Agreement concerning their creditworthiness, and no misrepresentation concerning creditworthiness constitutes a breach of the December 5 agreement. Eventually, Brennan offered to rescind the deal and return to the Harveys their money and truck. They got the truck back several months later. In the meantime, Mr. Harvey contacted Patricia Hanson, and they agreed on a lease/purchase arrangement. The Harveys continue to occupy the mobile home under this arrangement. Analysis of the fraudulent misrepresentations in the Hanson/Harvey transactions case requires close consideration of the allegations of the Administrative Complaint in DOAH Case No. 98-4081. The first material allegation is that Brennan, as Trustee, offered to purchase the mobile home from the Hansons. Petitioner has established this fact. The second material allegation is that Clark had a verbal listing from the Hansons to sell their mobile home. Petitioner has established this fact by reasonable inference. The third material allegation is that Clark told Hanson that Brennan would offer $30,000, less the commission. Petitioner has not established Clark's role in this offer, but Petitioner has established that Brennan, as Trustee, made such an offer. The fourth material allegation is that, even though the Hansons had not agreed to sell, Clark allowed the Harveys to move into the Hansons' mobile home. Petitioner has established this fact, but the record reveals that this was with the permission of Patricia Hanson. The fifth material allegation is that Respondents "offered" to sell the mobile home to the Harveys for $42,000. Petitioner has established this fact, but the record reveals that the Harveys knew that Brennan, as Trustee, was acquiring the mobile home from a third party. However, this allegation does not inform Brennan that she is facing a charge of misrepresentation in the contract, in which she warrants title that she does not have. This allegation only states that the "Harveys had been offered the mobile home by the Respondents for $42,000, despite the fact that a bona fide sale had never taken place between . . . Brennan and the Hansons." The sixth material allegation is that the Harveys paid $12,000 down in the form of the truck and other credits. Petitioner established these facts, except that the value of the truck was less than $12,000 and no other credits existed. The seventh material allegation is that Respondents did not advise the Hansons of the price or financing on the Harvey sale. Petitioner did not establish these facts. The eighth material allegation is that Brennan tried to void the purported sale, but Respondents kept the Hansons' furniture and refused to return the truck to the Harveys. Petitioner established that Brennan tried to void the Harvey transaction. Petitioner did not establish that Respondents kept the Hansons' furniture, and the evidence established that Respondents returned the Harveys' truck. This allegation informs Brennan that she allegedly committed fraud in trying to void the transaction without returning the parties to the status quo, but this allegation does not inform her that she is facing a charge of misrepresentation for her misstatements in the letter itself. For the reasons stated, Petitioner has failed to prove the material allegations of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. By subpoena issued March 27, 1998, Petitioner ordered "Noel D. Clark" and ABC to produce, on the same date, all records concerning a sale from Betty A. Smith, Trustee, to John E. and Elizabeth M. Crawford. The copy of the subpoena contains no return of service. Petitioner's investigator testified that he served the subpoena on Clark, who is "Noel D. Clark, Jr." Neither Clark nor ABC produced records in connection with the March 27 subpoena. Justifiably concerned with the enforceability of the subpoena, Petitioner issued two more subpoenas, both dated April 6, 1998, to produce documents relating to the Crawford transaction. One subpoena was directed to Clark and the other to ABC. The Clark subpoena bears a return of service, but it shows that the investigator served the subpoena on April 6 on Brennan, not Clark. The ABC subpoena bears no return of service, and the investigator who purportedly served the subpoena did not testify.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaints in DOAH Case Numbers 98-2722 and 98-4081. DONE AND ENTERED this 28th day of July, 1999, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 28th day of July, 1999. COPIES FURNISHED: William Woodyard, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Geoffrey T. Kirk, Senior Attorney Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Noel D. Clark Betsy L. Brennan ABC Home Brokers, Inc. 18060 North Tamiami Trail North Fort Myers, Florida 33917
Findings Of Fact At all times pertinent to the allegations contained herein, Petitioner, Division of Real Estate, was the state agency in Florida responsible for the regulation of the real estate profession and for the licensing of real estate professionals. Respondent was, at all times material to the issues herein, a licensed real estate salesman in this state. He was issued salesman's license 0419038 and from August 27, 1990 through September 2, 1991, was an active salesman with Scarlett Faulic & Associates located in Indian Shores, Florida. From September 3, 1991 through September 30, 1991, he was a salesman with Arn Realty Group, Inc., also in Indian Shores. Effective October 1, 1991, his license became inactive due to non-renewal and remained in that status until he renewed it on April 16, 1992 when he affiliated as a salesman with First Gulf Beach Realty, Inc. in Indian Rocks Beach, Florida. From July 28, 1992 to the date of the hearing, he was an active salesman with Bobby Byrd Real Estate, Inc. in Clearwater. Sometime prior to June 13, 1991, Ted Plihcik, presently a resident of Coram, New York and formerly the owner/occupant of the property in issue which is located in Pinellas County, Florida, met the Respondent at a garage sale at Respondent's home. Because Mr. Plihcik intended to move out of the area, he entered into a listing agreement with Respondent on behalf of Arn Realty's predecessor, under which the firm was either to rent or sell the property. This agreement was to expire on December 31, 1991, and there is no evidence it was cancelled prior to expiration. Sometime after Mr. Plihcik moved to New York, he received a telephone call from Respondent in which Respondent said he had a couple to rent the property for the rental amount previously stipulated, $650.00 per month, from which Respondent was to get a commission of 10%. Respondent indicated he would take a deposit from the tenants and that he had a signed lease. Prior to his departure, Mr. Plihcik had started to make some renovations to the property's garage. He had redone the bathroom area and was planning to make another room out of the garage. However, he never got around to completing the job or to putting in the windows. He had decided to change it back into a garage, and in fact the prospective tenants wanted a garage rather than another bedroom, so he directed Respondent to hire someone to finish the reconversion. At Plihcik's request, Respondent got several estimates for the work which Plihcik felt were too high. At that point, Respondent offered to do the work himself. Plihcik agreed and gave Respondent authorization to use the deposit money to pay for necessary materials and consistent with that agreement, on September 14, 1991, by letter, Plihcik authorized Arn Realty Group to release money to Danley for the "alterations and repairs he is doing to my property...." Because the Isabelles did not pay the full two month deposit, Mr. Plihcik later revised the authorization to allow Respondent to use rent money as well, but he did not relieve Respondent from the requirement to turn any money received as rent over to Arn Realty upon receipt and thereafter get payment from the company. It is obvious that Plihcik was under the opinion that the deposit money Danley had received from the tenants had been turned over to the broker, Arn Realty. Mr. Plihcik tried unsuccessfully repeatedly to contact the Respondent requesting a copy of the lease agreement, copies of receipts for materials purchased for the garage work, or anything else pertinent, even sending at least one letter by certified mail, the receipt for which bore what Plihcik recognized as Respondent's signature. He received no responses. Sometime in early August, 1991, Deborah Isabelle and her husband rented Mr. Plihcik's house through Respondent and put up a [portion of the 1st and last month rent. They also signed a lease which called for rent at $525.00 per month but, notwithstanding many requests for one, never received a copy. Each time they asked, Respondent would say he would get them one but he never did. At the time they rented the property, the garage was under repair and, after some negotiation, it was orally agreed upon that the work would be completed by move-in time, September 1, 1991. At one point, Respondent asked the Isabelles to pay the rent in cash because it would be easier for him to buy the things needed for the repair work he was to do. They acceded to this request for a while, writing some checks to the supermarket for cash to pay Respondent, but got only one receipt. Because they were uncomfortable with this cash arrangement, they asked Respondent for the name of the owner of the property and he replied, merely, "Ted." On one occasion, mail for Mr. Plihcik from a real estate agency came to the house. Ms. Isabelle thereafter got Mr. Plihcik's New York address from the County records, contacted him, and asked him if he had received his rent. She received a negative reply. She also asked him about the lease they had signed and he related he had not received one of those, either. In fact, when she called, Mr. Plihcik didn't know who she was he had never heard their name. During that conversation, Ms. Isabelle advised Mr. Plihcik that they had not received any of the things Respondent had promised; that he was also asking them for cash; and was frequently at the house. Mr. Plihcik said he'd take care of it but no more was done. In November, 1991, Ms. Isabelle set up a three way telephone call between the Isabelles, Mr. Plihcik and the Respondent. During that call, Respondent claimed he was doing the work promised; that he had mailed Mr. Plihcik some money in cash several weeks previously and could not understand why it had not been received. The lease agreement, at paragraph 6, dealing with maintenance and grounds upkeep, purports to require the Isabelles "... to help convert 3rd bedroom back to garage in lieu of $650.00 rent." Though Respondent contends the rent was reduced from $650.00 per month, as was called for in the listing agreement, to $525.00, conditioned upon the tenants' help with the work on the garage conversion, there is no evidence that Mr. Plihcik ever agreed to accept less than the $650.00 per month rent. In addition, Ms. Isabelle claims they did not agree to do any work and the lease did not contain that provision at the time they signed it some 2 or 3 weeks after they moved in. It is found that Respondent's contention is without merit even though Mr. Isabelle did take down some 2x4's so he could install his tool bench. Over the period of their occupancy, the Isabelles paid Mr. Danley a total of $1,531.50 by check directly or by check written for cash and turned over, as well as an additional $400.00 in cash. Six hundred dollars of the checks were made payable to Arn Realty, and it appears they were deposited to that company's account. The balance of the checks and the cash were either payable to Respondent directly or, in the case of the Kash & Karry checks, written for cash to give to him. Of the $400.00 Arn Realty check, $300.00 was paid over by company check to Respondent for repairs to the instant property on the same day as the Isabelles' check was deposited to the company account. Respondent admits he received a total of $1,355.00 from the Isabelle's, either directly or indirectly, but claims all of it was used for work on the house. He also claims he is still owed $1,001.00 from Mr. Plihcik which includes $630.00 in real estate commission owed the broker. Nonetheless, Mr. Plihcik claims he received none of the money paid to Respondent, nor has Respondent presented any evidence to show the money was spent on either materials or labor for the garage reconversion. Mr. Arn, the broker supervising Respondent during the time is issue here claims he had no knowledge Respondent had obtained a tenant for Mr. Plihcik before he got Plihcik's letter. His records show a listing agreement for the property which calls for a rental commission in the event the property were leased by the company. In this case, the commission would be paid to the company, not the salesman, and would be deposited to the company's escrow account for later split with the associate involved. At no time would it be appropriate for the sales associate to collect and disburse funds without going through the broker and he would not do it that way. He did not authorize it here. Mr. Arn admits to having written at least one check to Respondent from money's received from the tenant for work to be done on the Plihcik property. He released that money only after he received a letter from Mr. Plihcik authorizing the release of funds to Respondent. All the money he received from the checks he received in August, 1991, in the amount of $600.00, was paid out to Respondent for repair costs. When he subsequently received a letter from Mr. Plihcik regarding cash which Respondent claimed he had mailed directly but which was not received, Mr. Arn replied in writing that he had not authorized Respondent to either receive or disburse funds directly. The Isabelles moved out of the house in either December, 1991 or January, 1992. By that time, Respondent had done very little work on the property. Some building materials were still on the property which Mr. Plihcik said he had left there. They are sure Respondent had not provided it. Mr. Carl Carpenter, a registered contractor and home inspector examined the property in question in March, 1992 for a potential purchaser. At that time, he found the garage in the process of being converted to a room. The framing had been installed as had the windows, and the sheet rock was partially installed. There was also a small bathroom which was not operating properly. It was his opinion that the construction was progressing from garage to room, and not the opposite. Mr. Carpenter was also of the opinion that to convert the room back to a garage would cost somewhere in the range of $600.00 and should take about 2 days. It would about double that to reinstall the bath. The bath he saw on the property was old. Respondent offered an estimate to reconvert the garage from a contractor obtained in August, 1991 which showed a total price of $1,606.00. While this is substantially more than the price cited by Mr. Carpenter, whose estimate seems rather out of line, cost is not the issue. The important part of Carpenter's testimony relates to his belief that the work in progress seemed more of conversion to a room rather than return to a garage and tends to indicate Respondent had done little if any work on the property. Ms. Sutton, the Division's investigator, interviewed Respondent 3 times regarding this matter and found his statements to be inconsistent. While he claimed he had done some work on the property and had not finished it, he could not give her the exact amount he had received from the Isabelles. He also gave her a list of what he had spent the money he had received on, but had no receipts from workers or suppliers to back it up. Mr. Danly claimed he had sent cash to Mr. Plihcik but denied receiving any cash payments from the Isabelles. He claimed he gave them receipts for what they gave him, but they have no memory of receiving any. Mr. Danley takes no issue with the facts as outlined by Ms. Isabelle except as to the remodeling of the garage which he claims is not covered by the restrictions contained in Chapter 475, Florida Statutes. He claims that the payments made by the Isabelles were authorized by Mr. Plihcik to be kept by him as compensation for the repair work on the garage and not to be transmitted to Plihcik as owner because the work needed to be done and Plihcik did not have the money to pay to have it done. He also asserts that the lease was signed by the Isabelles with the requirement in it that they would help with the work as a condition of reducing the rent. He delayed starting on the remodeling until he got the money from Mr. Arn, which, at least in part, was as early as August 29, 1991. When he got that check, he started work. Originally, he states, he hired 2 young men to do the dry-wall, but the bathroom had to be framed before the dry wall could be installed. Then the water heater was installed and the power line installed for that, all of which he claims he did himself. The framing and closing up of the old door to the kitchen was done by Respondent with the assistance of a contractor. All of this, he asserts, was done in September and October, 1991, contrary to the Isabelle's claim that the only work done prior to their departure was the installation of some dry wall. Some materials were already in place but some of that had been damaged and had to be replaced. He claims he had 3 helpers to do all this work and paid them in cash. The sink was put back into its original position and he got the material to reinstall the toilet which he was unable to do because of back problems. Mr. Danley denies ever asking the Isabelles for cash or loans. He claims the only payments he received were in the form of checks payable to him or to Arn, and all money received from them was used for the work. He also admits to collecting the rent due in October which, he claims, was used for the restoration project. The only checks introduced into evidence not payable to Arn or Danley are 3 payable to Kash & Karry and of these, two are endorsed by Daniel Isabelle and one bears no endorsement at all. These are the checks which Ms. Isabelle claims were made to provide cash for Respondent at his request. Taken together, the evidence as presented by both sides tends to support Ms. Isabelle's story. Mr. Danley claims he did not finish the work because he could not find a door for the garage. He claims to have called many places but was unable to find a single garage door. A call to a Scotty's building supply store in that area revealed a single garage door was readily available, though by special order. Finally, he bought one from a builder in St. Petersburg for $235.00 which was paid in cash. The price included installation the following morning, and the site was already prepared. However, the builder never showed up with the door and he lost the payment. On balance, Respondent's account of the matter, unsupported as it is by any direct evidence beyond his own testimony, is found to be less than credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, recommended that a Final Order be issued by the Florida Real Estate Commission suspending Respondent, Paul Andrew Danley's license as a real estate salesman in Florida for a period of 3 years under such terms and conditions as are considered appropriate by the Commission; imposing a total administrative fine of $2,000.00; and imposing a reprimand. RECOMMENDED this 1st day of March, 1993, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 1st day of March, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-5598 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. & 2. Accepted and incorporated herein. 3. & 4. Accepted and incorporated herein. 5. Accepted. 6. - 8. Accepted and incorporated herein. 9. Accepted and incorporated. 10. & 11. Accepted and incorporated herein. 12. & 13. Accepted and incorporated herein. 14. Accepted and incorporated herein. 15. & 16. Accepted and incorporated herein. 17. Accepted but redundant with 4. 18. Accepted and incorporated herein. 19. - 22. Accepted and incorporated herein. 23. Accepted. 24. & 25. Accepted. 26. Accepted but not material to any issue. 27. Accepted and incorporated herein. 28. - 30. Accepted and incorporated herein. 31. - 33. Accepted and incorporated herein. 34. Accepted and incorporated herein. 35. Accepted but mot material to any issue. 36. & 37. Accepted and incorporated herein. 38. - 40. Accepted. 41. Accepted and incorporated herein. 42. Accepted and incorporated herein. 43. - 46. Accepted and incorporated herein. 47. Accepted. 48. - 53. Accepted and incorporated herein. 54. - 56. Accepted and incorporated herein. 57. Accepted. FOR THE RESPONDENT: 1. A - E. Considered more to be either argumnent on the state of the evidence or conclusions of law. Not accepted as a statement of fact as finally found. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street, Suite N-308 P.O. Box 1900 Orlando, Florida 32802-1900 Gilbert P. McPherson, Esquire 1822 Drew Street, Suite 8 Clearwater, Florida 34625 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
The Issue Whether Respondents are guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes, as alleged in the Administrative Complaint.
Findings Of Fact Petitioner is the agency of the State of Florida charged with the responsibility of regulating the practice of real estate pursuant to the provisions of Chapter 475, Florida Statutes, and other pertinent provisions of law and rules. Respondent, Francis Walid Jacob, is a duly-licensed real estate broker having been issued license number 0569854. Respondent, Renters Paradise Realty, Inc., is a duly- licensed real estate brokerage company, having been issued license number 0269583. At all times pertinent to this proceeding, Respondent Jacob was the qualifying broker for the corporate Respondent. At all times pertinent to this proceeding, Philip Jay Slewett was a licensed real estate salesperson employed by the corporate Respondent. Mr. Slewett's license number was 0614888. Related Management Services, Inc. (RMS), was, at all times pertinent to this proceeding, a real estate management company. Intercoastal Towers, an apartment complex, was one of the properties managed by RMS. At all times pertinent to this proceeding, Bruce Terwilliger was the managing Vice President of RMS. At all times pertinent to this proceeding, RMS had a practice of paying commissions to real estate professionals who referred tenants to Intercoastal Towers. The practice required that the real estate professional visit the apartment complex with a client and that the client subsequently lease an apartment at Intercoastal Towers. RMS became suspicious that certain real estate professionals had submitted invoices for clients that they had not referred to the Galahads Apartments, another apartment complex managed by RMS. Because the leasing director at the Galahads had previously been the leasing director for Intercoastal Towers, Mr. Terwilliger investigated whether his company had paid for falsified invoices at the Galahads and at Intercoastal Towers. During his investigation, Mr. Terwilliger reviewed all billings from real estate professionals for commissions based on referrals to Intercoastal Towers, and he interviewed residents to determine whether the billing real estate professional had referred the tenant. Signed statements, including affidavits, were collected during the course of Mr. Terwilliger's investigation, and an investigation by the Miami-Dade Police Department. Based primarily on what Mr. Terwilliger was told by the various residents, he concluded that RMS had paid commissions to the Respondent corporation based on invoices for professional services that had not been rendered. Respondents and the salespersons who generated the billing for a commission split the commission. Mr. Terwilliger met with Respondent Jacob about these invoices. Afterwards, Respondent Jacob had his company reimburse RMS for the invoices at issue in this proceeding. Phillip Slewett was a real estate salesperson employed by the Respondent corporation at the times pertinent to this proceeding. Mr. Slewett admitted that he and another real estate salesperson employed by the Respondent corporation generated the falsified invoices to RMS. Mr. Slewett also implicated two employees of RMS in this billing scam. The evidence did not establish that Respndent Jacob or the Respondent corporation knew or should have known that the invoices generated by Mr. Slewett and the other salesperson were false.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order dismissing the Administrative Complaint against both Respondents. DONE AND ENTERED this 2nd day of November, 1999, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of November, 1999.
Findings Of Fact At all times relevant hereto, Petitioner was licensed as a real estate broker by the Florida Real Estate Commission. In May 1988, he was working as a broker-salesman with G.V. Stewart, Inc., a corporate real estate broker whose active broker is G.V. Stewart. On April 20, 1989, Respondent submitted a Contract for Sale and Purchase to the University of South Florida Credit Union who was attempting to sell a house at 2412 Elm Street in Tampa, Florida, which the seller had acquired in a mortgage foreclosure proceeding. This offer reflected a purchase price of $25,000 with a deposit of $100 (Exhibit 2). The president of the seller rejected the offer by striking out the $25,000 and $100 figures and made a counter offer to sell the property for $29,000 with a $2000 deposit (Exhibit 2). On May 9, 1989, Respondent submitted a new contract for sale and purchase for this same property which offer reflected an offering price of $27,000 with a deposit of $2000 held in escrow by G.V. Stewart (Exhibit 3). This offer, as did Exhibit 2, bore what purported to be the signature of William P. Murphy as buyer and G. Stewart as escrow agent. In fact, neither Murphy nor Stewart signed either Exhibit 2 or Exhibit 3, and neither was aware the offers had been made at the time they were submitted to the seller. This offer was accepted by the seller. This property was an open listing with no brokerage firm having an exclusive agreement with the owner to sell the property. Stewart's firm had been notified by the seller that the property was for sale. Respondent had worked with Stewart for upwards of ten years and had frequently signed Stewart's name on contracts, which practice was condoned by Stewart. Respondent had sold several parcels of property to Murphy, an attorney in Tampa, on contracts signed by him in the name of Murphy, which signatures were subsequently ratified by Murphy. Respondent considers Murphy to be a Class A customer for whom he obtained a deposit only after the offer was accepted by the seller and Murphy confirmed a desire to purchase. Respondent has followed this procedure in selling property to Murphy for a considerable period of time and saw nothing wrong with this practice. At present, Respondent is the active broker at his own real estate firm.
Recommendation It is RECOMMENDED that William H. McCoy's license as a real estate broker be suspended for one year. However, if before the expiration of the year's suspension Respondent can prove, to the satisfaction of the Real Estate Commission, that he fully understands the duty owed by a broker to the seller and the elements of a valid contract, the remaining portion of the suspension be set aside. ENTERED this 29th day of November, 1989, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1989. COPIES FURNISHED: John Alexander, Esquire Kenneth E. Easley 400 West Robinson Street General Counsel Orlando, Florida 32802 Department of Professional Regulation William H. McCoy 1940 North Monroe Street 4002 South Pocahontas Avenue Suite 60 Suite 106 Tallahassee, Florida 32399-0792 Tampa Florida 33610 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact At all times material hereto, Fetters has been a licensed real estate broker in the State of Florida, trading as RONTRON Realty and Investment, with offices in Largo, Florida, and Choudhury has been a licensed real estate salesperson at RONTRON Realty. Fetters was Choudhury's broker at all times material hereto. Stanley and Mary K. Jankiewicz listed their home for $189,000 with Harvey Seybold, a licensed real estate broker, and neighbor. On January 28, 1988, Choudhury contacted Seybold and asked to see the Jankiewicz house. Seybold showed the house that same day. On January 30, 1988, Choudhury presented a contract for the sale and purchase of the home to Seybold and Jankiewicz. The purchasers, John and Gail Taylor, offered $185,000, but this offer was unacceptable to Jankiewicz because it called for him to hold a $150,000 purchase money mortgage. Jankiewicz proposed a counteroffer, which still provided for a sales price of $185,000, but only required him to hold a purchase money mortgage of $25,000. It also required the Taylors to obtain a firm financing commitment within 45 days for a first mortgage in the amount of $129,000. The Taylors accepted this counteroffer, and the transaction was scheduled to close on March 30, 1988, as proposed in Jankiewicz' counteroffer. Jankiewicz and Seybold testified that Choudhury told them, on January 30, 1988, that the Taylors had a net worth of from $2 to $3 million, and that he had a copy of their financial statement in his office, which he had reviewed. They claim that he promised to provide them with a copy of this financial statement on February 1, 1988. Jankiewicz testified that Choudhury's representation about the financial condition of the Taylors was a significant inducement for him to propose his counteroffer, and he would not have gone through wish this sale had he known on January 30, 1988, what he subsequently learned about their net worth. Choudhury denies making any representation about the Taylors' net worth. He testified that he had only met the Taylors on one occasion, and had no way of knowing their net worth since he denies having a copy of their financial statement at that time. When the Taylors' financial statement was not provided on February 1, 1988, Jankiewicz and Seybold made repeated attempts to contact Choudhury, most of which were futile. He would not return their calls. Finally, on March 7, 1988, Choudhury did send Seybold a copy of the Taylors' financial statement, and Seybold immediately forwarded it to Jankiewicz. The financial statement is dated January 31, 1988, and indicates a net worth of $238,100. Choudhury testified that he forwarded this financial statement to Seybold as soon as he received it from the Taylors, but that when he looked it over he was "shocked". Choudhury offered no credible explanation of why he would be "shocked" to see the Taylors' financial statement, unless he had expected a far higher net worth. Yet, he testified that he had no knowledge of their net worth. Based upon the demeanor of the witnesses, and after considering the testimony of Choudhury, Seybold and Jankiewicz, as well as Choudhury's unexplained testimony about being "shocked" to see the Taylors' net worth, it is found that Choudhury did represent to Jankiewicz and Seybold on January 30, 1988, that the Taylors had a net worth of from $2 to $3 million. This statement was false, but it was a material inducement which led Jankiewicz to make his counteroffer, accepting a $25,000 purchase money mortgage. The contract for sale did not provide any contingency which addressed Jankiewicz' concerns about the Taylors' net worth. He and Seybold believed Choudhury's representations, and admitted at hearing that it was an oversight on their part not to insist on a contingency in the sales contract. They simply took Choudhury's word that he had seen their financial statement, and it showed a net worth of $2 to $3 million. When he received the Taylors' financial statement in early March, 1988, Jankiewicz tried to back out of the deal, but because there was no contingency in the sales contract, and because the Taylors threatened to sue him for breach of contract if he did not close, he went through with the sale. The sale closed, as scheduled, on March 30, 1988. The Taylors had obtained a first mortgage through bank financing in early March, and have subsequently made payments to Jankiewicz under the purchase money mortgage which he holds, although on occasion they have been late with their payments. At no time did Fetters participate in the discussions which took place with Jankiewicz and Seybold concerning this sale. Choudhury made all contacts with them, presented the sales contract, and attended the closing. The Petitioner's investigator, Leo Huddleston, visited Fetters on June 28, 1988, to examine Fetters' records concerning the Jankiewicz transaction, but Fetters brought no records with him to this meeting. He claimed that Choudhury had all of these records. Subsequently, he did provide Huddleston with escrow records showing a $20,000 deposit in his escrow account, and copies of three checks from the Taylors totaling $20,000, which he claimed he received as their deposit on the Jankiewicz house, and which he stated he then deposited in his escrow account. These checks do indicate on their face that they were for a house deposit. However, Fetters was never able to produce a copy of his deposit slips or bank records which would directly establish that the Taylors' checks were in fact deposited into his escrow account. There was no indication on the face of the checks that they were deposited into his escrow account, or that he had an escrow account established for this purpose. Fetters testified at hearing, that he had lost his bank records, and presumed that a former tenant had taken them when he moved. Fetters failed to keep adequate records of his escrow account that would allow an audit of funds deposited into, and withdrawn from, such account. He could not establish that he had an escrow account on which he was signatory. He was also negligent in failing to safeguard any such records which he may have had, and could not produce complete records of his escrow account which would establish that the Taylors' deposit checks were placed in his escrow account, and remained there until they were withdrawn by a $20,000 cashier's check that was exchanged at closing. Following initial investigation of a complaint filed by Jankiewicz against Fetters and Choudhury, a probable cause panel decided not to issue an Administrative Complaint, and they were informed, in August, 1988, that this complaint file had been closed. Subsequently, however, new evidence was discovered concerning the fact that Seybold had also been present on January 30, 1988, when Choudhury met with Jankiewicz, and Seybold confirmed Jankiewicz' recollection of Choudhury's statements. Thereupon, this complaint was resubmitted to a probable cause panel, and the Administrative Complaint which is at issue in this case was filed.
Recommendation Based upon the foregoing, it is recommended that Florida Real Estate Commission enter a Final Order suspending Respondent Fetters license for a period of six months, and suspending Respondent Choudhury's license for a period of one year. DONE AND ENTERED this 17th day of July, 1989 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 1989. APPENDIX The Petitioner did not timely file Proposed Findings of Fact. Respondent Choudhury did file a Memorandum of Law which contains unnumbered paragraphs under a section referred to as "Facts". This Memorandum has been considered in the preparation of this Recommended Order, but specific rulings cannot be made on the matters contained in the section labeled "Facts" since this consists largely of argument on the evidence without any citation to the record as required by Rule 22I-6.031(3), F.A.C. Rulings on the Respondent Fetters' Proposed Findings of Fact: 1-2. Adopted in Finding 1. 3. Adopted in Findings 2, 8. 4-5. Adopted in Findings 3, 4. Rejected in Finding 5, and as argument on the evidence, rather than a proposed finding of fact. Adopted and Rejected in part in Findings 10, 11. Rejected in Finding 11. Not a proposed finding of fact. COPIES FURNISHED: ARTHUR R. SHELL, ESQUIRE DIVISION OF REAL ESTATE P. O. BOX 1900 ORLANDO, FLORIDA 32802 LESLIE M. CONKLIN, ESQUIRE 2120 U.S. 19, SOUTH SUITE 210 CLEARWATER, FLORIDA 34624 RONALD P. TEEVAN, ESQUIRE 200 NORTH GARDEN AVENUE SUITE A CLEARWATER, FLORIDA 34615 DARLENE F. KELLER DIVISION DIRECTOR P. O. BOX 1900 ORLANDO, FLORIDA 32802 KENNETH EASLEY, GENERAL COUNSEL NORTHWOOD CENTRE 1940 NORTH MONROE STREET SUITE 60 TALLAHASSEE, FLORIDA 32399-0792 =================================================================
The Issue At issue herein is whether respondents' real estate licenses should be disciplined for-the alleged violations set forth in the administrative complaint. Based upon all of the evidence, the following facts are determined:
Findings Of Fact At all times relevant hereto, respondent, Juan Rios, was a licensed real estate broker having been issued license number 0155126 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Victoria R. Rios, is a licensed real estate broker-salesman having been issued license number 0331183 by petitioner. The Rios are husband and wife and presently reside at 855 80th Street, #1, Miami Beach, Florida. On December 13, 1982, Juan Rios obtained a six-month multiple listing agreement to sell a house located in Hacienda Estates at 11451 S.W. 33rd Lane, Miami, Florida. The agreement was executed by Rios "As Realtor" and by the property owner, Mercedes Garcia. At Mercedes' request, the Rios placed an initial sales price of $145,000 on the home. On December 15, a similar agreement was executed by Rios and Garcia on condominium unit 9B, Laguna Club Condominium, 10710 N. W. 7th Street, Miami, Florida. That property was also owned by Garcia. Although the agreement introduced into evidence does not contain Rios' signature, at final hearing Juan Rios acknowledged that he had executed such an agreement. The listing agreements provided that if the properties were leased during the term of the agreements, the listing realtor would receive a brokerage fee of 10% for such leasing. The agreement also provided that the realtors were not responsible for vandalism, theft or damage of any nature to the property. Garcia is a native and resident of Venezuela, where she owns a radio station. The two properties in question were previously owned by her father. When the father died, apparently sometime in 1982, Mercedes inherited the house and condominium. The Rios were friends of the father, and agreed to list and manage the properties as a favor to the deceased. Mercedes left the country after the agreements were signed, and has apparently not returned. Although she is the complainant who initiated this matter, she did not appear at final hearing. The house at 11451 S. W. 33rd Lane had been vandalized prior to the listing agreement being signed. According to documents introduced into evidence, the property has also been the subject of subsequent vandalisms, the nature and extent of which are unknown. A tenant was eventually procured by Mercedes' aunt in February, 1983 at a monthly rate of $800. The tenant, a Mrs. Ramirez, paid some $4,800 in rents and deposits before she was killed at the home in June, 1983. The Rios spent some $2,644.36 of the $4,800 on repairs to the vandalism and for general maintenance. They also retained a 10% commission for their services, or $480. That left $1,675.64 owed to Mercedes. No lease was apparently ever signed by Ramirez, or at least none was given to the Rios by the relative who procured the tenant. The home was eventually sold to Mercedes' aunt for $85,000.1 None of the rental monies were placed in the Rios' trust account. The condominium unit was rented in June, 1983. The tenant, Oscar Ruiz, had answered an advertisement run by the Rios in a local newspaper. Although Ruiz executed a lease to rent the unit at a monthly rate of $500, the Rios did not have a copy of same, and claimed none was kept in their records. According to the Rios, Ruiz continued to rent the unit through April, 1984, or for eleven months. Total monies collected by the Rios from Ruiz, including a $500 security deposit, were $6,000, of which $3,364.86 was spent for maintenance, utilities, two mortgage payments, and a $500 payment to the owner (Mercedes). An additional $40.33 was spent on a plumbing bill, and $600 was retained as a commission by the Rios. This left $2,724.53 owed to Mercedes. None of the rental monies were placed in the Rios' trust account. In the spring of 1984, Mercedes retained the services of an attorney in Miami to seek her monies due from the Rios. Up to then, she had received no income or accounting on the two properties. The attorney wrote the Rios on several occasions beginning in April 1984, asking for a copy of the lease on the condominium unit, the security deposit, an accounting of the funds, and all other documents relating to the two, properties. He received his first reply from the Rios on May 3, 1984 who advised him that they had attempted to reach Mercedes by telephone on numerous occasions but that she would never return their calls. They explained that rental proceeds had been used to repair vandalism damage and structural defects. When the attorney did not receive the satisfaction that he desired, he filed a civil action against the Rios on October 10, 1984. On October 26, 1984 the Rios sent Mercedes a letter containing an accounting on the two properties reflecting that she was owed $4,400.17 by the Rios. To pay this, they sent a $140 "official check," and a promissory note for the balance to be paid off in 40 monthly installments at 10% interest. They explained that their real estate business had closed, and due to financial problems, they were unable to pay off the monies due any sooner. They also asked that she instruct her attorney to drop the suit. Mercedes rejected this offer and has continued to pursue the civil action. It is still pending in Dade County Circuit Court. At final hearing, the Rios characterized their involvement with Mercedes as a "professional mistake," and one undertaken out of friendship for Mercedes' father. They acknowledged they did not use a trust account on the transactions and that they had used the $4,400 in rental money due Mercedes for their own use. They considered the excess rent proceeds to be compensation for other "services" performed by them on behalf of Mercedes. However, there is no evidence of any such agreement between the parties reflecting that understanding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is Recommended that Juan and Victoria Rios be found guilty as charged in Counts II and III, and be found guilty of culpable negligence and breach of trust in Count I. It is further recommended that Juan Rios' license be suspended for one year and that Victoria Rios' license be suspended for three months. DONE and ORDERED this 20th day of January, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1986
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Respondents be DISMISSED. It is further RECOMMENDED that Respondents promptly return the rental agreement fee to Narendra Patel in accordance with their agreement on the record in this cause. DONE AND ENTERED this 22nd day of October, 1981, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1981.
The Issue Whether Respondent's registration as a real estate broker should be suspended or revoked for alleged violations of Sections 475.25(1)(a) , (i) & (j) , Florida Statutes. The Respondent appeared at the hearing without legal counsel and was advised as to his right to be represented by legal counsel at his own expense. He elected to represent himself at the hearing. He was also advised of his rights under the Administrative Procedure Act, including his right to testify under oath if he so desired, and he indicated his understanding of these rights. The hearing officer advised counsel for Petitioner that although the Administrative Complaint contained an alleged violation of Section 475.25(1)(i), this violation was not stated in the Notice of Hearing. Petitioner's counsel stated that Paragraph 2, Count 2, of the Administrative Complaint stated a violation of that subsection, but that it had not been alleged as a separate ground therein for adverse action. However, counsel stated that if the evidence presented indicated such a violation, Petitioner would amend its complaint at that time to conform to the evidence, and that it desired to present evidence concerning such a possible violation. At the conclusion of the hearing, Petitioner requested that this alleged violation be included in its Complaint. Respondent was advised that he could request a continuance if necessary to defend against the additional allegation, but he stated that he was able to defend against it without need for a continuance.
Findings Of Fact Respondent was a registered real estate broker during the period when the alleged violations occurred and is currently registered in the same capacity. (Petitioner's Exhibit 9). On or about February 27, 1973, Respondent was the real estate broker for Associated Real Estate of Broward, Inc., a Florida Corporation, in which he owned all of the stock. On that date, one Lawrence Tellschow delivered to Respondent a check in the sum of 4000.00 as a deposit upon property which he desired to purchase from Louise M. Orner, located in Boca Raton, Florida. Tellschow signed a deposit receipt contract on that date which provided on the reverse under "Deposit" that "(Checks issued for the deposit on this contract will be deposited promptly for clearance (after acceptance of this contract by all parties) and the holder of the deposit will not be responsible for the nonpayment of checks". Respondent thereupon obtained the signature of the seller on the contract and returned to his office at which time Tellschow told him not to deposit the check in the escrow account because he had no bank and the check was no good. He further stated that someone else was supposed to give him a check for the deposit, but had not done so. Respondent thereupon returned the check to Tellschow, called up the seller's son and informed him that there was no contract and that he would send a letter to that effect. He did so on March 1st, wherein it was stated that the check did not clear the bank and that after returning the check to Tellschow, the latter had then decided to withdraw his offer. However, Respondent also stated in this letter words that indicated he had not, in fact, deposited the check (Testimony of DeGeorge, Harper, Chappell; Petitioner's Exhibits 1,4,5,6,7) On March 1, 1973, Respondent, Henry Pinelli, Lawrence Tellschow, and Associated Real Estate of Broward, Inc., entered into an agreement whereby Pinelli and Tellschow would contribute monies for the purchase of stock in the corporation, and become officers and directors thereof. The agreement further provided that the corporation would engage in real estate investment and development. It also stated that Pinelli had made certain loans to the corporation for the purchase of properties, that he contemplated making and/or securing additional loans for such purpose, and that he would be entitled to receive a note and mortgage from the corporation as to all such funds. This agreement was modified by a later undated agreement which provided that a certain single family residence under construction at Lighthouse Point, Florida, real property owned by the corporation should be held by the corporation simply as "nominee and for the account of Henry Pinelli" who would assume all obligations and be entitled to all profits derived from said property. It further provided that Respondent and the corporation would have the exclusive right to sell the said property and that the six percent commission there for would go solely to the benefit of Respondent Respondent's Exhibits 1 & 2). The three principals in the corporation had a number of disputes with respect to the activities of the corporation which resulted in the resignation of Tellschow on June 15, 1973, and differences between Respondent and Pinelli as to entitlement to real estate commissions. Although their agreement provided that Respondent would have the exclusive right to sell properties which were acquired by funds advanced by Pinelli (and which were later deeded to him by the corporation), Pinelli gave listings to other realtors for his property located at 3531 N.E. 30th Avenue, Lighthouse Point, Florida. Respondent's conviction that he was being ill-treated by Pinelli led him to place a mechanic's lien on the Lighthouse Point property on November 1, 1973. This lien was predicated upon Respondent allegedly having furnished labor, services or materials consisting of: "exclusive sales agent". On May 9, 1974, the Circuit Court of Broward County, Florida, issued an Order requiring Respondent to remove the claim of lien. Respondent had not had the permission of the owners of the property to place the lien thereon. By the time the lien was removed, various law suits were pending between the parties which had not been resolved (Testimony of Bamman, Henry Pinelli, Patricia Pinelli, Waderlow, DeGeorge; Petitioner's Exhibits 10 & 11: Respondent's Exhibits 4-20).
Recommendation That Respondent Donald D. DeGeorge be issued a written reprimand for violation of Section 475.42(1)(j) , Florida Statutes. DONE and ORDERED this 4th day of March, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Richard J.R. Parkinson, Esquire Mr. Donald G. DeGeorge Florida Real Estate Commission c/o Grear Real Estate, Inc. .2699 Lee Road 901 S.E. 17th Causeway Street Winter Park, Florida 32789 Ft. Lauderdale, Florida
Recommendation Based on the foregoing facts and conclusions of law, I recommend that the information filed herein be dismissed in it's entirety. Done and Entered this 24th day of August, 1976, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Walsh and Associates By Gerald M. Walsh, Esquire 404 Courthouse Square Building 200 Southeast Sixth Street Ft. Lauderdale, Florida 33301
