Findings Of Fact Victor L. Contessa, Respondent, was licensed as a real estate broker and officer/director of Cavalier Southern Realty, Inc., in Port Orange, Florida, by the Florida Real Estate Commission on June 1, 1981, and was so licensed at all times pertinent to this inquiry. His license number is 0016808, and Cavalier Southern's license number is 0217638. Respondent received an MRS circular on the property in question in late 1977 or early 1978 from the listing agency out of Hollywood, Florida. The contact point on the flier for the property was a Mr. Henry W. Harbinson, Sr. This flier showed the legal description of the property as containing land "North of Spruce Creek . . . ." Mr. Contessa's view of the property did not indicate a total of 28.77 acres as described on the circular, so he called Mr. Harbinson, who advised him that the property south of Spruce Creek was included, and who sent a map tending to show this. He also, during the course of negotiations with the Chiodos for a portion of the property in December, 1977, corresponded with Mr. Konigsburg, attorney for the sellers. Mr. Konigsburg agreed to include the south portion for an additional consideration. At some time in the latter part of 1977 or early 1978, Norman H. Riley answered an advertisement in the newspaper concerning a piece of property for sale in the Spruce Creek area of Volusia County, Florida. As a result, he met the Respondent, who was acting as broker on the property. Mr. Contessa told Riley how to get out to the property, but did not accompany him there. Riley looked at the property, which consisted of a total of more than 28 acres, and, as a result, in late January, 1978, signed a contract for sale and purchase of a portion of the total property (approximately seven acres), offering a purchase price of $56,000, on which he paid a deposit of $500 to Mr. Contessa. The contract was witnessed, as to Riley's signature, by Victor Contessa, Respondent, and was executed/accepted by the seller on January 20, 1978. Closing was scheduled for on or before March 7, 1978. However, because the property in question was part of an estate and other individuals were involved in other purchases of contiguous and adjacent parcels, for some reason, the sale could not be consummated. Mr. Riley left the $500 deposit with Respondents, Contessa and Cavalier. Efforts were made to finalize the transaction for several years without success, and finally in mid-1981, Respondent Contessa contacted Riley and told him he could probably purchase the whole piece if he wanted it. Since Mr. Riley's financial situation had improved, he felt he was now in a position to buy that much, and he arranged for another real estate agent to make an appraisal of the property after talking with his bankers. This appraisal showed a value of just over $120,000 for the 28 acres. As a result, on May 4, 1981, Mr. Riley made another offer to the owners of the property, the Estate of Joseph Green, for the entire parcel, agreeing to pay $120,000. This contract described the property being bid on as: North of Spruce Creek in Government Lot 1, Section 34, Township S Range 33 East, a/k/a: 34-l6S-33E, Book 3 Page 91, Volusia County. [Emphasis added.] The previously executed contract for $56,000 contained the same legal description with the following addition: "Sections A, B, G, H, J and K on the attached Plat of the above property." The property was described in part in the formal appraisal dated April 26, 1981, as: LEGAL DESCRIPTION: Part of Assessors Sub in Section 34 Township 16 South Range 33 East Volusia County, Florida. NEIGHBORHOOD: Located on the East and West Side of Spruce Creek Road extending from Taylor Road South to the North Shore of Spruce Creek . . . . The May 4, 1981, offer of $120,000 was rejected by the owner, who countered with a demand of $170,000. Mr. Riley and Mr. Contessa discussed this, and Riley concluded he could not pay that much. During these discussions, the point was raised by Mr. Contessa that he thought there might be enough land south of Spruce Creek on which to build a house. This interested Riley; and Respondent Contessa, who indicated he had never been out to the property personally, again told Riley how to get out there. Riley found the property, got on that portion south of Spruce Creek, and walked it, satisfying himself that there was, in fact, enough land on which to build a house. When Mr. Contessa confirmed that the acreage in question included this piece south of Spruce Creek, Mr. Riley concluded that taken together, both pieces were worth more than the appraised value of $120,000; and he ultimately, on June 15, 1981, after an interim offer of $135,000 which was rejected, submitted an offer of $150,000 for the property, which was accepted. The legal description of this last contract for sale, after the discussions referenced above, was the same as on the prior one, without change, which referenced that property "North of Spruce Creek. Mr. Riley could not get a bank loan to cover the amount needed to buy the property in question, but was of the opinion he could get the necessary extra money by selling off the small triangular piece on the south side of Spruce Creek, which he believed to be included in the parcel he was buying. As a result, he negotiated a sale of that smaller parcel to another individual for $35,000. Closing on Mr. Riley's purchase of the overall parcel was delayed for some reason. During this delay period, Mr. Riley learned that the triangular parcel was not included in the land he was purchasing. There is no evidence to indicate Mr. Contessa knowingly or intentionally misrepresented the size of the property.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent Victor L. Contessa be reprimanded and pay an administrative fine of $250. Since Respondent Victor L. Contessa is the owner and active firm member of Cavalier Southern Realty, Inc., further disciplinary action against the real estate corporation is unnecessary. RECOMMENDED this 7th day of March, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 7th day of March, 1983. COPIES FURNISHED: William M. Furlow, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Mr. Victor L. Contessa Cavalier Southern Realty, Inc. 506 Ridgewood Avenue Port Orange, Florida 32019 Mr. Carlos B. Stafford Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Mr. Fred M. Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues are whether Respondent is guilty of interfering with or intimidating any person who is, or is expected to be, a witness in any investigation or proceeding relative to a violation of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(i), Florida Statutes.
Findings Of Fact Respondent was actively licensed as a Florida real estate salesperson through March 31, 2002, and was so licensed during the events described below. In 2001, Anna Marie Nealey and her husband, Edward Nealey, were selling their home in Oviedo. On January 20, 2001, Respondent submitted a contract of purchase and sale on behalf of the buyer, Paul Branic. The parties agreed to a closing on March 2, 2001. The record does not describe in much detail the nature of this real estate transaction. The exhibits do not include even the contract. The only witness was Ms. Nealey, who claims only a limited understanding of the transaction. Ms. Nealey's complaint centers on Respondent's handling of an earnest money deposit, but no competent evidence supports findings of any kind concerning such a deposit or how it was handled. In her complaint letter to Petitioner, Ms. Nealey describes her dissatisfaction with a closing statement that her friend and real estate agent received on April 11, although it seems that the statement was prepared by an independent closing agent, not Respondent. Ms. Nealey asserts that, two days after receiving the closing statement, she and her real estate agent met with the closing agent, who stated that $3150 had been paid the sellers outside closing. Ms. Nealey's complaint letter adds that she and her husband left the closing without any money, although she does not preclude the possibility of a credit for the $3150 by way of a note or other credit on the closing statement. When Ms. Nealey finally spoke with Respondent, he said that he had done everything that he was supposed to have done. Ms. Nealey's complaint states: "I didn't like the manner in which he talked to me about this situation; it led me to believe there was more than what was being told." Later, Ms. Nealey's letter asserts: "I have a gut feeling that [Respondent] is trying to hide some things, and won't be completely honest with me. . . . I just want to know if there is a copy of a cashier's check or money order receipt given to the mortgage company with our names on it and where my money is at this time." By letter dated May 18, 2001, one of Petitioner's investigators acknowledge the receipt of Ms. Nealey's "recent complaint." However, the complaint letter itself is undated. Also on May 18, 2001, Mr. and Ms. Nealey entered into an agreement with Respondent. Respondent agreed to pay the Nealeys $3550 upon the delivery of a duly assigned note, originally from Mr. Branic to the Nealeys; a signed covenant against further action; and a signed statement to the Florida Department of Banking to the effect that the dispute involving Respondent has been settled. The covenant provides that the Nealeys will not file a legal action or disciplinary complaint against Respondent or the mortgage company, and the $3550 settles all pending disputes to the full satisfaction of the Nealeys, who retract any allegations that they had already made against Respondent or the mortgage company. Prior to the signing of the Agreement and other settlement documents, the Nealeys had filed a complaint with the Florida Department of Banking and Finance against a mortgage company involved in the transaction. Respondent was aware of this complaint when he and the Nealeys signed the Agreement and the Nealeys signed the other settlement documents. However, when signing the Agreement, Respondent was unaware that the Nealeys had also filed a complaint against him with Petitioner. After signing the Agreement, Ms. Nealey informed Respondent that she had also filed a complaint against him with Petitioner. Respondent became angered and refused to complete the settlement transaction, although he called the Nealeys the next morning and indicated he would purchase the mortgage the following day, which he did. A few days later, when Respondent received formal notice of the Nealeys' complaint from Petitioner on May 23, 2001, he wrote them a letter accusing them of defrauding him out of $3550 and identifying their action as a basis for a civil proceeding in fraud and misrepresentation and for criminal action. The letter warns that, if the Nealeys did not take corrective action immediately, Respondent would file a civil action and refer the matter to the State Attorney's Office. The letter adds that the Nealeys' original claims were baseless, but time-consuming and damaging to business reputations. The Nealeys' satisfaction with the $3550 that they obtained for the Branic second mortgage sufficed for the Florida Department of Banking and Finance to close the case against the mortgage company. However, Petitioner continued to prosecute this case, which originally involved claims arising out of the underlying transaction and a claim arising out of the post- closing dealings between Respondent and the Nealeys, but now only involves a claim arising out of the post-closing dealings between Respondent and the Nealeys. As already noted, the record does not permit more than a rough reconstruction of the real estate transaction that has engendered this disciplinary case. However, Ms. Nealey supplied more detail during her testimony than she supplied in her complaint letter. She conceded during her testimony that she and her husband had agreed to hold a second purchase-money mortgage and note from Mr. Branic. Ms. Nealey testified that her problems with the transaction only surfaced when Mr. Branic failed to make payments on this mortgage and another that he had given to Ms. Nealey's real estate agent. This failure caused Ms. Nealey to file her complaints against the mortgage company, and Respondent. Based on this record, there is no evidence of any fraud or misdealing by Respondent in the underlying real estate transaction. It appears that the Nealeys, and perhaps Ms. Nealey's real estate agent, took notes from Mr. Branic, and Mr. Branic did not make the payments for very long. It appears that, even though she lacked evidence of misdealing, Ms. Nealey reported suspicions and concerns to Petitioner, and it appears that Petitioner initially found cause to prosecute Respondent for his acts and omissions in connection with the underlying transaction, as well as his post-closing acts and omissions. It is unclear if Petitioner's theory of the remaining case relies in part on Respondent's acts and omissions in connection with the Agreement and other settlement documents. If so, this theory would fail because Respondent did not then know that Petitioner had filed a complaint against him with Petitioner. Absent Respondent's knowledge that Petitioner had commenced a prosecution, he could not have been capable of interfering with a witness against him. The evidence clearly fails to establish any such knowledge on the part of Respondent at the time of the execution of the Agreement and payment of the $3550 for the Branic second mortgage. At the time, Respondent thought only that he was resolving a complaint filed against a mortgage company, not him, with the Florida Department of Banking and Finance. If he had already known of the complaint already filed with Petitioner, he would not have angrily lost his temper, refused to close, and then regained his composure the next day and close promptly on the settlement. When given the opportunity, Ms. Nealey could not supply any other reason for Respondent's otherwise- inexplicable behavior. By the time of the May 23 letter, Respondent, who had been aware of the complaint with Petitioner for several days, surmised either that the Nealeys had not performed their end of the bargain or that, if they had, Petitioner would not drop the disciplinary case. The threat of civil action is unremarkable because, on the facts of this record, it was justified. The threat of a criminal complaint to gain civil advantage raises a distinct issue, but, more important to this case, is whether Respondent was interfering with, or intimidating, a witness in an investigation or prosecution against him. A close examination of the record reveals Respondent's exasperation with a complainant's willingness to use the power of the disciplinary process to insulate herself from the consequences of her bad business judgment and impose these consequences unfairly upon Respondent. Although not obligated to do so, Respondent voluntarily bought the Branic second mortgage and reasonably thought that he was thus purchasing the satisfaction and acquiescence of the Nealeys. When Petitioner failed to dismiss the subject case (until the start of this hearing), Respondent threatened Ms. Nealey with severe consequences if she did not then stop complaining about him. In essence, as her complaints were groundless, the threat demanded only that Ms. Nealey stop her prevarications and start to tell the truth--i.e., by admitting that she and her husband had made a bad business decision in taking the Branic second mortgage and Respondent had relieved them of the mortgage, although he had not legally been required to do so. The May 23 letter represents an attempt by Respondent to coerce Ms. Nealey to tell the truth. Such an effort serves, rather than impedes, Petitioner's investigation by allowing it to gather facts on which it may make an informed determination whether Respondent violated any disciplinary laws. Evidently, when apprised of those facts, Petitioner determined that Respondent had not violated any such laws in the underlying transaction, nor did he in his post-closing dealings with the Nealeys.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 27th day of August, 2003, in Tallahassee, Leon County, Florida. S 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 27th day of August, 2003. COPIES FURNISHED: Marie Powell, Chairman Florida Real Estate Commission Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32308-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christopher J. DeCosta Senior Attorney Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite N-801 Orlando, Florida 32801 Jonathan M. Dougherty 127 West Fairbanks Avenue Number 439 Winter Park, Florida 32789
The Issue Whether respondents' real estate licenses should be revoked, suspended, or otherwise disciplined on charges of false promises, misrepresentation, culpable negligence, and breach of trust in a business transaction.
Findings Of Fact Respondent Terry L. Baker is now and was at all times material to the charges a licensed real estate broker holding license no. 204679. (P-1) He also was president, secretary, and treasurer of respondent Terry L. Baker and Associates, Inc., a licensed real estate brokerage corporation (lic. no. 213974) located at 1418 West Edgewood Avenue, Jacksonville, Florida. There are no other officers, directors, or members of this brokerage corporation; respondent owns 100 percent of the capital stock. (P-1) Respondent was, and continues to be, the active broker for this real estate brokerage corporation. (P-1) On July 21, 1982, respondent assisted in the negotiation and closing of a real estate sales transaction between Dolores B. Hawkins, as seller, and James W. and Patricia L. Dobson, as purchasers. The real estate involved was a residential lot and dwelling unit located at 7065 Bishop Hatcher Drive East, Jacksonville, Florida, and was, at the time, the subject of a mortgage foreclosure proceeding. (Testimony of Hawkins, Baker; P-2, P-6) The real estate sales contract was signed by the seller and buyers on July 21, 1982. At that time, respondent submitted a written estimate of the seller's closing costs. This estimate, signed by both respondent and the seller, showed that the seller would net $1,598.25 from the transaction. It was specifically noted that this net figure did not include an Atlantic Bank payment. This payment was a recognized obligation of the seller and was required to obtain the release of a record judgment lien held by the bank. Ms. Hawkins, the seller, understood that this payment was her obligation and was not included in the $1,598.25 figure. The written estimate also included seller's cost of approximately $2,000 for attorney's fees and back mortgage payments. The attorney's fees were related to the legal costs associated with the mortgage foreclosure proceeding. An existing mortgage balance, to be assumed by the buyers, was listed as approximately $19,000. (Testimony of Hawkins, Baker; P-3) On two separate occasions prior to closing, respondent told seller Hawkins that there had been an increase in the charge for attorney's fees associated with the mortgage foreclosure. (Testimony of Hawkins, respondent) Prior to closing, respondent loaned seller Hawkins $220 to help her pay her apartment rent. They agreed that the loan would be repaid out of the proceeds from the sale of her property. (Testimony of Hawkins, Baker; P-4) At closing on August 17, 1982, respondent presented the seller with a Seller's Closing Statement listing various charges to the seller, including the loan repayment of $220, the payment to Atlantic Bank (for release of lien) of $425, attorney's fees of $638.50, and an assumed mortgage of $19,847.51. The net amount due the seller was $675.82. The buyers paid the balance due at closing and the seller delivered the warranty deed to respondent for recording. A couple of days later, respondent, in turn, wrote a check for $675.82 and delivered it to the seller as net proceeds from the sale. Payment of respondent's commission was shared by the seller and buyers at closing. Respondent received the warranty deed at closing and the parties to the transaction expected him to have it recorded. He accepted this duty and undertook to perform it. However, he did not record the warranty deed on the public records until October 4, 1982--almost three months later--after repeated requests by the mortgage service company for a copy of the recorded deed. The delay was caused by respondent's waiting to receive a release of the Atlantic Bank lien so that he could record the two instruments at the same time. But after repeated requests for a copy of the recorded deed, he finally recorded it even though he had not yet received the release of lien. (Testimony of Baker, Hawkins, Dobson) Contrary to the Department's contention, respondent's delay in recording the deed does not constitute culpable negligence, false promises, misrepresentation, or breach of trust in a business transaction. His lack of diligence in recording the deed is, instead, an act of simple negligence. His carelessness exposed the buyers to unnecessary risk. During this delay of almost three months, the seller, while record titleholder, could have reconveyed the property or subjected it to additional encumbrances. Respondent, in delaying recordation almost three months, failed to exercise that degree of care which a reasonable man, in the same situation and with similar experience, would not have omitted. His failure to exercise due care does not, however, demonstrate willful, wanton, or reckless disregard for the rights of others. The Department also charges that respondent did not have--at time of closing--the lien of Atlantic Bank satisfied. Prior to closing, the respondent- -on behalf of the seller--negotiated the outstanding debt with attorneys for Atlantic Bank: He was told that the bank would accept fifty cents on the dollar, or $425. Thereafter, respondent collected this amount as a charge to the seller at closing. (Testimony of respondent) Respondent, however, did not have an executed release of lien form, or the judgment lien satisfied, at closing. He asserts--without contradiction-- that the bank's attorney at first offered to prepare the release, but later asked respondent to do so. By the time of closing, respondent had been either unable to obtain the release from the attorney, or he had been unable to obtain and complete the form on his own. When asked why he proceeded to close the transaction although the release had not been obtained, he states that both buyers and seller consented to the closing because the property was facing foreclosure. Respondent's assertion that the parties consented to closing, in the absence of a release of lien, is unrefuted and accepted as fact. No evidence was presented that, in light of the parties' consent, closing of the transaction was improper.
Recommendation Based on the foregoing, it is RECOMMENDED: That the administrative complaint, and all charges contained therein, be dismissed for failure of proof. DONE and ENTERED this 23rd day of September, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. 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 23rd day of September, 1983.
The Issue In this disciplinary proceeding, the issues are: (1) whether Respondents, who are licensed real estate brokers, failed within a reasonable time to satisfy a civil judgment relating to a real estate commission; (2) whether Respondents failed to maintain trust funds in an escrow account as required; and (3) whether disciplinary penalties should be imposed on Respondents, or either of them, if Petitioner proves one or more of the violations charged in its Administrative Complaint.
Findings Of Fact The Parties Respondent Marlene Montenegro Toirac ("Toirac") is a licensed real estate broker subject to the regulatory jurisdiction of the Florida Real Estate Commission ("Commission"). Respondent Home Center International Corp. ("HCIC") is and was at all times material hereto a corporation registered as a Florida real estate broker subject to the regulatory jurisdiction of the Commission. Toirac is an officer and principal of HCIC, and at all times relevant to this case she had substantial, if not exclusive, control of the corporation. Indeed, the evidence does not establish that HCIC engaged in any conduct distinct from Toirac's in connection with the transactions at issue. Therefore, Respondents will generally be referred to collectively as "Toirac" except when a need to distinguish between them arises. Petitioner Department of Business and Professional Regulation, Division of Real Estate, has jurisdiction over disciplinary proceedings for the Commission. At the Commission's direction, Petitioner is authorized to prosecute administrative complaints against licensees within the Commission's jurisdiction. The Veloso Judgment Toirac and Elena Veloso ("Veloso") did business together and wound up as opponents in court. Veloso got the better of Toirac, obtaining, on June 5, 2001, a judgment in the amount of $4,437.60 against her and HCIC from the Dade County Court. The judgment liquidated a real estate commission that Veloso claimed the defendants owed her. On June 12, 2001, Toirac filed a Motion to Set Aside Final Judgment, wherein she asked the county court to (a) vacate its judgment in favor of Veloso, on the ground that the defendants had not been served with process and (b) consolidate Veloso's county-court proceeding with an action then pending in circuit court, which Toirac had brought against Veloso.1 As of the final hearing in this case, Toirac's motion, after four years, had not been heard or decided. As of the final hearing in this case, Toirac had not satisfied the judgment in favor of Veloso. The Escrow Account Shortfall On January 24, 2002, Tibizay Morales, who was then employed by Petitioner as an investigator, conducted an audit of Toirac's records. (The impetus for this audit was Petitioner's receipt, on or about June 20, 2001, of a complaint from Veloso.) Pursuant to the audit, Ms. Morales determined that the balance in Toirac's escrow account was $4,961.05. Ms. Morales determined further that Toirac's trust liability, i.e. the total amount of money that she should have been holding in escrow on her clients' behalf, was $12,242.00. Thus, there existed a shortfall of $7,280.95 in Toirac's escrow account. Toirac was not able, at the time of the audit, to explain the shortfall. A few weeks later, however, by letter dated February 13, 2002, Toirac informed Ms. Morales that the shortfall had been caused by the issuance, "in error," of a check in the amount of $7,345.00, which was drawn on HCIC's escrow account and payable (evidently) to HCIC; HCIC had deposited the funds into its operating account, thereby creating, according to Toirac, an "overage" of $7,345.00 in the latter. To correct the problem, Toirac had arranged for the transfer of $7,345.00 from HCIC's operating account to its escrow account, which was accomplished on or about February 1, 2002. The Charges In counts I and IV, Petitioner charges Respondents with failing to account for and deliver trust funds, in violation of Section 475.25(1)(d)1., Florida Statutes.2 Petitioner's position is that Respondents failed within a reasonable time to satisfy the county-court judgment in favor of Veloso. In counts III and V, Petitioner accuses Respondents of having failed to maintain trust funds in the real estate brokerage escrow account until disbursement was properly authorized, in violation of Section 475.25(1)(k), Florida Statutes. Petitioner's position is that the escrow account shortfall identified on January 24, 2002, is proof that funds held in escrow had been disbursed without proper authorization. Ultimate Factual Determinations There is no dispute (for Toirac admitted at final hearing) that the judgment debt owed by Respondents to Veloso relates to a real estate commission. It is also undisputed that, as of the final hearing, the county-court judgment had not been satisfied. The undersigned determines that Respondents have failed to satisfy the civil judgment in Veloso's favor within a reasonable time.3 Therefore, the undersigned finds Respondents guilty of violating Section 475.25(1)(d)1., Florida Statutes.4 It is determined that the erroneous transfer, via check, of funds from HCIC's escrow account to its operating account constituted an unauthorized disbursement of funds entrusted to Toirac by others who had dealt with her as a broker. While this might have resulted from the simple mistake of an incompetent bookkeeper, as Toirac maintains, nevertheless the disbursement was unauthorized and substantial——amounting to approximately 60 percent of Toirac's total trust liability. Therefore, the undersigned finds Respondents guilty of violating Section 475.25(1)(k), Florida Statutes. In view of the foregoing, Petitioner has established the charges set forth in counts I, III, IV, and V of its Administrative Complaint, by clear and convincing evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order that: (a) finds Respondents guilty as charged in counts I, III, IV, and V of the Administrative Complaint; (b) suspends Respondents' respective real estate licenses for 90 days; and (c) imposes an administrative fine of $2,500 against Respondents, jointly and severally; and (d) places Respondents on probation for a period of at least 3 years, subject to such lawful conditions as the Commission may specify. DONE AND ENTERED this 14th day of September, 2005, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 14th day of September, 2005.
The Issue The central issue in this case is whether Petitioners are entitled to recover against the Mortgage Brokerage Guaranty Fund and, if so, the priority of payment to be applied to their claim. A secondary issue is whether claimants who gave notice prior to Petitioners are entitled to payment or whether they have waived or abandoned their claims.
Findings Of Fact Based upon the stipulations filed by the parties and the documentary evidence, I make the following findings of fact: The Mortgage Brokerage Guaranty Fund (the "fund") was created in 1977 to provide recovery for any person who meets all of the conditions prescribed in Section 494.043, Florida Statutes. The Department is charged to disburse the fund according to Section 494.044, Florida Statutes. Section 494.043, Florida Statutes, (Supp.1986) provides: Any person who was a party to a mortgage financing transaction shall be eligible to seek recovery from the Mortgage Brokerage Guaranty Fund if: The person has recorded a final judgment issued by a Florida court of competent jurisdiction in any action wherein the cause of action was based on s. 494.042(2); The person has caused to be issued a writ of execution upon such judgment and the officer executing the same has made a return showing that no personal or real property of the judgment debtor liable to be levied upon in satisfaction of the judgment can be found or that the amount realized on the sale of the judgment debtor's property pursuant to such execution was insufficient to satisfy the judgment; The person has made all reasonable searches and inquiries to ascertain whether the judgment debtor possesses real or personal property of other assets subject to being sold or applied in satisfaction of the judgment, and by his search he has discovered no property or assets or he has discovered property and assets and has taken all necessary action and proceedings for the application thereof to the judgment, but the amount thereby realized was insufficient to satisfy the judgment; The person has applied any amounts recovered from the judgment debtor, or from any other source, to the damages awarded by the court. The person, at the time the action was instituted, gave notice and provided a copy of the complaint to the division by certified mail; however, the requirement of a timely giving of notice may be waived by the department upon a showing of good cause; and The act for which recovery is sought occurred on or after September 1, 1977. Recovery of the increased benefits allowable pursuant to the amendments to s. 494.044 which are effective October 1, 1985, shall be based on a cause of action which arose on or after that date. The requirements of paragraphs (1)(a),(b),(c),(d), and (e) are not applicable if the licensee or registrant upon which the claim is sought has filed for bankruptcy or has been adjudicated bankruptcy; however, in such event the claimant shall file a proof of claim in the bankruptcy proceedings and shall notify the department by certified mail of the claim by enclosing a copy of the proof of claim and all supporting documents. Pertinent to this case, Section 494.044, Florida Statutes, (Supp. 1986) Provides: Any Person who meets all of the conditions Prescribed in s 494.043 may apply to the department for payment to be made to such person from the Mortgage Brokerage Guaranty Fund in the amount equal to the unsatisfied portion of that person's judgment or judgments or $20,000, whichever is less, but only to the extent and amount reflected in the judgment as being actual or compensatory damages. As to claims against any one licensee or registrant, payments shall be made to all persons meeting the requirements of s. 494.043 upon the expiration of 2 years from the date the first complete and valid notice is received by the department. Persons who give notice after 2 years from the date the first complete and valid notice is received and who otherwise comply with the conditions precedent to recovery may recovery from any remaining portion of the $100,000 aggregate, in an amount equal to the unsatisfied portion of that person's judgment or $20,000, whichever is less, but only to the extent and amount reflected in the judgment as being actual or compensatory damages, with claims being paid in the order notice is received until the $100,000 aggregate has been fully disbursed. * * * (3) Payments for claims shall be limited in the aggregate to $100,000, regardless of the number of claimants involved, against any one mortgage broker or registrant. If the total claims exceed the aggregate limit of $100,000, the department shall prorate the payment based on the ratio that the person's claim bears to the total claims filed. The first notice received by the Department alleging a claim against Barry Koltun or Oakland Mortgage Company was filed on August 13, 1984. This notice was filed on behalf of John and Mary Ahern. The Department utilized this notice in computing the two-year period addressed in Section 494.044(1), Florida Statutes. For purposes of recovery from the fund, the individual mortgage broker (Koltun) and the company qualified by the broker (Oakland) are treated as one. Petitioners filed an initial notice of their claim against the fund on October 16, 1985. This claim was asserted against Oakland Mortgage Company, Barry Koltun and Robert Tamarro. On January 23, 1987, the Department issued a "Notice of Intent to Grant or Deny Payment from the Mortgage Brokerage Guaranty Fund Re Oakland Mortgage Company." This notice outlined the status of some thirteen claims which had given notice of their civil actions against the licensee within the two year period. Two claimants, Kusich and Szafran, had provided all documentation required by Section 494.043, Florida Statutes; consequently, they were approved for payment. The Petitioner's claim was denied because they had allegedly failed to satisfy the statutory requirements of Section 494.043, Florida Statutes and had failed to do so prior to August 12, 1986 (the end of the two year period). The Petitioners timely filed a petition for formal Chapter 120 proceedings challenging the Department's denial of their claim for payment. Subsequent to January 23, 1987, Petitioners completed the conditions precedent for recovery and submitted all documentation required to satisfy the requirements of Section 494.043, Florida Statutes. On July 6, 1987, the Department received notice and a claim from the Intervenors. This claim satisfied the requirements of Section 494.043, Florida Statutes. Of the thirteen original claims filed, only two claimants (Kusich and Szafran) completed all conditions of Section 494.043, Florida Statutes, on or before August 12, 1986.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Banking and Finance, Division of Finance, enter a Final Order finding the claims of Rusich and Szafran eligible for payment, and that the claim of Petitioners be evaluated as part of the second class established in Section 494.044(1), Florida Statutes, DONE and RECOMMENDED this 1st day of December, 1987, in Tallahassee, Florida. JOYOUS D. PARRISH 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 1st day of December, 1987. COPIES FURNISHED: Paul A. Zeigler, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A. Suite 1010, Monroe Park Tower 101 North Monroe Street Tallahassee, Florida 32301 Paul C. Stadler, Jr., Esquire Department of Banking and Finance Division of Finance Suite 1302 The Capitol Tallahassee, Florida 32399-0350 Joseph Degance, Esquire 1995 East Oakland Park Boulevard Suite 101 Fort Lauderdale, Florida 33306 Jack F. Weins, Esquire Boca Bank Building Suite 200 855 South Federal Highway Boca Raton, Florida 33432 Morey Udine, Esquire 3111 University Drive Suite 425 Coral Springs, Florida 32065-6930 Hon. Gerald Lewis Department of Banking and Finance Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 =================================================================
Findings Of Fact Petitioner, Diane Aquino, is a 33 year old female who currently resides at 1271 North West 23rd Avenue, Pompano Beach, Florida. By application filed on February 10, 1981, Petitioner sought licensure as a real estate salesman by Respondent, Department of Professional Regulation, Board of Real Estate. (Respondent's Exhibit l) Question 7(a) on the application asked whether any judgment or decree of a court has been entered against the applicant in which the applicant was charged with any fraudulent or dishonest dealing. Question 15(a) asked whether the applicant has ever had any registration to practice a profession revoked, annulled or suspended upon grounds of fraudulent or dishonest dealing or violations of law. Question 15(b) asked whether applicant has ever surrendered her registration to practice any regulated profession or occupation. Aquino answered each of those questions affirmatively and included a written statement describing actions taken against her by the Securities and Exchange Commission (SFC) based upon fraudulent activities which occurred in 1976. The application was denied by Respondent by letter dated April 28, 1981, on the ground she had failed to demonstrate that she was "honest, truthful, trustworthy, and of good character, and ... (has) a good reputation for fair dealing." The denial precipitated the instant hearing. Between September, 1975, and April, 1976, Petitioner was employed by Colonial Securities, Inc. located in Jersey City, New Jersey, in the capacity of a registered sales assistant. Colonial was a broker-dealer registered with the SEC pursuant to Section 15A of the Securities Exchange Act of 1934. In 1977 Colonial, Petitioner and two other Colonial employees were the subject of an administrative proceeding instituted by the SEC charging that they had "willfully violated and willfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act in that they, directly and indirectly, made use of the means and instruments of transportation and communication in interstate commerce and of the mails to offer, sell and deliver after sale shares of the common stock of Tucker (Drilling Company, Inc.) when no registration statement was filed or in effect as to such securities pursuant to the Securities Act." (Respondent's Exhibit l). Because of the time and expense involved in contesting these charges, and upon advice of her counsel, Aquino consented to the entry of an order by the SEC that made findings that she had willfully violated and willfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act of 1933. The consent order also imposed the following sanctions: that Aquino be barred from association with any broker, dealer or investment company, except in a secretarial capacity; and that, after a period of two years she be permitted to apply to become reassociated in non-supervisory and non-proprietary capacity. Aquino is now reapplying for registration with the SEC. In addition to the sanctions imposed by the SEC, Petitioner has been enjoined by a federal court in New York from violating Sections 5(a) and 5(c) of the Securities Act of 1933. Since the entry of the consent order, Petitioner has owned and operated a laundry and dry cleaner business in Pompano Beach, Florida, and been employed as a sales assistant at a stock brokerage firm in Fort Lauderdale, Florida. Since 1980 she has been the president and 50 percent stockholder of Financial Communications, Inc., a small private investment company located in Pompano Beach, Florida. In her present business, Petitioner deals with private investors who entrust her with sums of money for different securities and stock investments. One such investor described her as being honest and trustworthy, and stated he is completely satisfied with the business relationship that they enjoy. Another investor attested to Aquino's excellent reputation for honesty and truthfulness. A former employer indicated he is willing to sponsor her reapplication for licensing with the SEC as a registered securities representative. He is also willing to hire her if that application is approved. Other than the difficulties incurred in 1977, Petitioner has had no other problems that would reflect adversely upon her reputation and integrity.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Petitioner, Diane Aquino, for licensure as a real estate salesman be GRANTED. DONE and ENTERED this 29th day of September, 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 29th day of September, 1981. COPIES FURNISHED: Steven L. Rishken, Esquire Suite 203, Dadeland Towers North 9700 South Dadeland Boulevard Miami, Florida 33156 Linda A. Lawson, Esquire Assistant Attorney General The Capitol LL04 Tallahassee, Florida 32301 Diane Aquino 1271 NorthEast 23rd Avenue Pompano Beach, Florida 33062
Findings Of Fact On March 3, 1993, the Petitioner submitted an application to the Department for registration as an associated person of Securities America, Inc. Previously, on May 1, 1989, the Petitioner had filed an application with the Department for registration as an associated person of Integrated Resources Equity Corporation. On July 25, 1989, the Department denied the Petitioner's application for registration as an associated person of Integrated Resources Equity Corporation. Petitioner requested an informal hearing and on November 28, 1989, a hearing took place regarding the Department's intent to deny the Petitioner's application for registration with Integrated Resources Equity Corporation. On January 30, 1990, a Final Order was entered by the Department denying the Petitioner's registration of Integrated Resources Equity Corporation. The grounds for denial contained in the January 30, 1990 Final Order included the Petitioner's guilty plea to delivery of a controlled substance in the state of Wyoming in 1982, and the Petitioner's failure to disclose the guilty plea to the Department on the Petitioner's U-4 form (Uniform Application to Act as a Securities Dealer) on two occasions in 1987 and 1988. In addition, subsequent to the filing of his application, Petitioner was arrested on January 4, 1989 for the second degree felony of possession of cocaine to which he plead nolo contendere in the circuit court for Pinellas County, Florida on September 27, 1989. Petitioner did not amend his application and disclose this arrest and conviction. The Petitioner did not file an appeal regarding the January 30, 1990 Final Order issued by the Department. Additionally, on December 30, 1992, the Department again denied an application, submitted by Petitioner, for registration by issuing a Notice of Denial of Registration as an Associated Person under Chapter 517, Florida Statutes. The December 30, 1992, Notice of Denial was based upon the Petitioner's failure to timely respond to the Department's request for additional information, which failure amounted to a violation of Rule 3E-301.002(3), Florida Administrative Code. The denial was issued without prejudice to Respondent's right to reapply upon the submission of a new application and payment of the fee. The Petitioner did not file a petition for hearing in response to the Department's Notice of Denial of Registration dated December 30, 1992. In 1982, Petitioner was arrested for delivery of a controlled substance in the state of Wyoming. Petitioner plead guilty to this charge, adjudication of guilt was withheld and Petitioner was placed on probation by the court. That probation was terminated by court order. In 1989, Petitioner was arrested for possession of a controlled substance in Pinellas County, Florida. Petitioner plead nolo contendere to this charge, adjudication of guilt was withheld and Petitioner was placed on probation by the court. The record is unclear whether probation has been terminated by the court. At present, Petitioner is married. He and his wife have three children. In 1990, he and his family moved to Brevard County, Florida where he has been self-employed as a life and health insurance salesman for several companies. He has not been the subject of disciplinary action in this field. Petitioner denied he had ever sold cocaine; instead he insisted that his role was limited solely to that of being a delivery boy for other drug salespersons. He stated he has undertaken no specific drug rehabilitation program other than to discontinue involvement with controlled substances. In addition to his own testimony acknowledging and explaining his criminal record, he presented testimony regarding his character. Letters from character witnesses consisted of Petitioner's wife, mother, pastor and three other individuals. The pastor and other individuals wrote that they had known Petitioner only since 1991, or some point in time since the occurrence of his last criminal offense in 1989. Each of the individuals was impressed with Petitioner and believed him to be of good character, and indicated some knowledge, absent specific details, of his criminal background.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered denying Petitioner's application for registration as an associated person, submitted on March 3, 1993. DONE and ENTERED this 27th day of May, 1994, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of May, 1994. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact. Petitioner did not submit proposed findings. Respondent's proposed findings of fact. Accepted in substance: paragraphs 1-10. COPIES FURNISHED: Bridget L. Ryan, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Ronald Liakos 788 Americana Boulevard, N.E. Palm Bay, Florida 32907 Honorable Gerald Lewis Comptroller Department of Banking & Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking & Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue The issues in this case are whether the Respondent, Peter C. Fischbach, should be disciplined on the charges alleged in the Administrative Complaint, FDBPR Case No. 97-83729. Specifically, the charges allege that, "under the guise of an alleged real estate 'consulting fee,'" Fischbach converted $10,000 of a prospective buyer's escrow money, contrary to their agreement that Fischbach only would be paid commission on the closing of a purchase, which did not occur. The three-count Administrative Complaint charges that these allegations establish violations of: Count I, Section 475.25(1)(b), Florida Statutes (1997), for fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction fraud, misrepresentation; Count II, Section 475.25(1)(d)1, Florida Statutes (1997), for failure to account or deliver funds; and Count III, Section 475.25(1)(k), Florida Statutes (1997), for failure to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement was properly authorized.
Findings Of Fact The Respondent, Peter C. Fischbach, is a licensed real estate broker in Florida. However, he has not been very active in actual real estate brokering; most of his involvement in the real estate business has been investing in and renting real estate on his own account. In 1994, Fischbach met Peter Graf, a German national who vacationed in Florida with his wife, Kaethe. The Grafs were interested in purchasing a campground on Alligator Point in Franklin County, Florida. One of Fischbach's tenants was an acquaintance of the Grafs, and the Grafs were impressed with Fischbach's property. When the Grafs became acquainted with Fischbach, they also were impressed with Fischbach's knowledge of real estate investing. In early 1995, the Grafs asked Fischbach to help him evaluate the Alligator Point property and put together an offer to purchase. Fischbach agreed; however, he attempted to explain that he did not do much real estate brokering and would prefer to be paid a fee for his services in an amount agreed to by the parties after Fischbach was finished with his work so that both would be in a better position to evaluate the fairness of his remuneration. Fischbach proposed that once they agreed to the amount of Fischbach's fee, Fischbach would return to the Grafs any sales commission paid to Fischbach on the transaction. The Grafs readily agreed to Fischbach's proposal. Fischbach made several trips to Franklin County, discussed strategy with the Grafs, negotiated with the prospective seller, and telephoned and corresponded with the Grafs in Germany. At the request of the Grafs' attorney, Fischbach assumed the responsibility of preparing a letter of intent to memorialize the agreement between seller and buyer. The attorney planned to prepare all legal documents necessary to implement the letter of intent. Fischbach first drafted an incomplete and undated Purchase and Sales Agreement for a purchase price of $1,250,000. (Petitioner's Exhibit 1). This rough draft included a provision for a 6% sales commission payable to Fischbach "at the closing." The evidence suggested that this draft was not signed by the Grafs or presented to the seller. On or about March 10, 1995, Fischbach completed a revised letter of intent. (Petitioner's Exhibit 2). The revised letter of intent included a provision for a 4 percent sales commission payable to Fischbach "at the closing." It also provided for a $100,000 deposit payable $25,000 initially and $75,000 by September 1, 1995, until which time the Grafs would be entitled to investigate and inspect the property. Closing was proposed for January 1, 1996. The parties were to execute the Purchase and Sales Agreement to be prepared by the Grafs' attorney as soon as possible and within 30 days. This letter of intent apparently was signed by the Grafs and presented to the seller, but the seller declined and asked for more money. On or about March 21, 1995, Fischbach again revised the letter of intent. (Respondent's Exhibit 5). This revision was for a purchase price of $1,350,000. It omitted any provision for a sales commission for Fischbach. As before, it provided for a $100,000 deposit payable $25,000 initially and $75,000 by September 1, 1995. But this revision only gave the Grafs until May 30, 1995, to investigate and inspect the property, and required the parties to execute the Purchase and Sales Agreement to be prepared by the Grafs' attorney on or before May 31, 1995. As before, closing was proposed for January 1, 1996. This second revised letter of intent apparently was signed by the Grafs and the seller, and the Grafs paid the initial deposit of $25,000 to Fischbach to be held in escrow. The day after Fischbach prepared the second revised letter of intent for signature by the parties, he met with the Grafs to discuss his fee. In Fischbach's mind, although he intended to continue to be available to answer questions and assist the Grafs through closing, his primary work was done, and he and the Grafs were in a position to come to an agreement on what Fischbach should be paid for his work. The Grafs were accompanied by Martin Lehner, a German friend and financial advisor to the Grafs, who Fischbach thought would be able to translate for them as necessary to assure that all parties fully understood the discussion. Fischbach opened the discussion by telling the Grafs that 6% was a normal real estate commission. However, it was Fischbach's opinion that 6% of the $1,350,000 purchase price in the letter of intent was too much for what Fischbach had done for the Grafs. Fischbach suggested that they instead consider a fee in the amount of 2% of the purchase price, or $27,000. The Grafs agreed. The parties then agreed that the fee would be payable $10,000 in September 1995, $10,000 in September 1996, and $7,000 in September 1997. The agreement was reduced to writing in the form of a note stating: "Peter's commission (2%), 3/22/95, $10,000 Sept 95, $10,000 Sept 96, $7,000 Sept 97." (Respondent's Exhibit 5). Peter Graf signed the note in the presence of his friend and financial advisor, signifying the agreement of him and his wife. Fischbach intended to communicate to the Grafs that he was entitled to his $27,000 fee regardless whether the transaction closed. However, Fischbach's use of the term "2% commission" both in the discussion about his fee and in the note intended to memorialize the agreement may have contributed to a misunderstanding as to what would happen if the transaction did not close. In order to facilitate the eventual transfer of funds from the Grafs to the seller at closing, and to enable Fischbach to attend other matters on the Grafs' behalf while they were in Germany, Fischbach had the Grafs execute a power of attorney, in favor of Fischbach, on or about May 31, 1995. During the summer of 1995, Fischbach participated in continued negotiations designed to achieve tax benefits for both seller and buyer. The Grafs also consulted immigration attorneys to acquire the visa necessary for him to purchase and operate the campground. By letter dated July 13, 1995, Fischbach apprised the Grafs of the status and reminded them both that a second deposit installment of $75,000 was due in escrow by September 1, 1995, and that the first $10,000 of Fischbach's fee was also due in September 1995. The Grafs received the letter but never questioned what it said about Fischbach's fee. On or about July 17, 1995, the Grafs' attorney completed a proposed Contract for the Sale and Purchase of Real Estate and Agreement for the Sale and Purchase of Business Assets. However, before it was executed the Grafs insisted on the addition of a provision that would suspend purchase money mortgage payments for one year in the event of a catastrophic hurricane. By letter dated September 15, 1995, Fischbach notified the Grafs that the seller refused to include the hurricane catastrophe provision in the Purchase and Sales Agreement and that the seller was giving the Grafs until October 2, 1995, to sign the proposed Contract for the Sale and Purchase of Real Estate and Agreement for the Sale and Purchase of Business Assets. Fischbach also advised the Grafs: "If we are done for now, I would like to close up your escrow account, pay myself the first $10,000 payment as agreed, and return the remaining money to Martin [Lehner] for him to invest for you." The Grafs received the letter but never questioned what it said about Fischbach's fee. When Fischbach did not hear from the Grafs by the seller's deadline, Fischbach assumed the deal was off and wrote to the Grafs on October 3, 1995: "I now need to close your $100,000 plus interest escrow account. I also would like to pay myself the first $10,000 real estate consulting payment that was due in September. Deborah and I are getting married and we could use the money." In fact, Fischbach did not get married, and he did not need the money; the second quoted sentence was Fischbach's way of trying to ask for the overdue payment in a light-hearted manner. The Grafs received Fischbach's October 3, 1995, letter and again did not question what it said about Fischbach's fee. However, by this time it was occurring to the Grafs that they were going to be out $10,000 and not have anything to show for it. Notwithstanding the agreement regarding Fischbach's fee, the Grafs now thought $10,000 was too much to pay Fischbach in light of the failure of the deal to close. They decided to take it up with Fischbach when they returned to Florida from Germany. The Grafs never communicated to Fischbach at any time that they had any questions whatsoever about Fischbach's fee, or Fischbach's intention to deduct it from the escrow money. On October 18, 1995, Fischbach paid himself $10,000 and refunded the balance of the Grafs' deposit plus interest. Peter Graf testified at one point that he and his wife were back in the United States when the escrow account was closed, but he also testified that he did not return until November 1995. It is found both that the Grafs had not yet returned and that the Grafs still had not contacted Fischbach to object to his fee or to his intention to deduct $10,000 from escrow when Fischbach closed the escrow account. Peter Graf testified that he contacted Fischbach shortly after the Grafs returned to Florida to complain about Fischbach's fee and the deduction of $10,000 from the escrow refund. Fischbach testified that he heard nothing from the Grafs until approximately the middle of February 1996. Due to irreconcilable direct conflict in the testimony, it was not proven that the conversation occurred earlier than the end of January or early February 1996. Whenever their first conversation on the subject occurred, Graf told Fischbach there should not have been any fee since there was no closing, and Fischbach's response was that the Grafs had agreed to the fee. Fischbach thought that he was able to remind the Grafs of their fee agreement, again explain it to them, and thereby resolve their complaint. Fischbach wrote to the Grafs' attorney on February 26, 1996, in response to a telephone call from the attorney, in which the fairness of Fischbach's fee was questioned. In the letter Fischbach again explained in detail the agreement for the fee under which the Grafs actually still owed Fischbach another $17,000. Fischbach wrote that he saw no reason why he should have to give the Grafs any money back. Fischbach's letter also confirmed that the Grafs had approached Fischbach the preceding week to complain about the fee, but that Fischbach thought the matter had been discussed, explained and settled. The Grafs' attorney declined to take their case against Fischbach. He told the Grafs that as far as he was concerned, the dispute was "between you two." Later, the Grafs consulted a Louisiana attorney and requested that the attorney do "whatever was necessary." According to Peter Graf, the Louisiana attorney lodged a complaint with the Florida Real Estate Commission. Despite the evidence that the Grafs agreed to a $27,000 "consulting fee" for services rendered, they maintained that the fee should not be paid because there was no closing. Yet, the Grafs concede that Fischbach is entitled to something for his work, and they offered him $2,500 to $3,000. Fischbach, on his part, still maintains that he is owed another $17,000 but had not tried to collect it, he says, due to "embarrassment" about the dispute. He testified that it never occurred to him to return the $10,000 to escrow and have the Florida Real Estate Commission resolve the dispute and issue a disbursement order because he was not familiar with the procedure, not being very active in the brokerage of real estate.
Recommendation Based 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 charges against the Respondent, Peter C. Fischbach. DONE AND ENTERED this 23rd day of March, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 23rd day of March, 1999. COPIES FURNISHED: Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Suite N-308A 400 West Robinson Street Orlando, Florida 32801 Peter C. Fischbach 405 Central Avenue St. Petersburg, Florida 33701 James Kimbler, Acting Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Orlando, Florida 32802-1900 William Woodyard, Acting General Counsel Department of Business and Professional Regulation Northood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times pertinent to the charges, Respondent was a licensed real estate salesman and broker-salesman, license number 0326235. In 1983, Dorothy Nutt and Diane Falstad were the owners of a house located at 608 Hillcrest Street, Orlando, Florida. In December of 1983, Ms. Nutt and Ms. Falstad placed this house for sale with real estate broker Frank Daley. The listing was an exclusive listing except as to the Respondent and another individual, for which no commission would be paid, if a contract submitted by the Respondent was accepted by Nutt and Falstad prior to December 26, 1983. On December 25, 1983, the Respondent, along with his parents, Barbara Okoniewski and Louis Okoniewski, Jr., submitted a written contract to Diane Falstad and Dorothy Nutt for the purchase of the 608 Hillcrest Street property. The contract was accepted by the sellers on December 26, 1983. The contract, as executed by the Respondent and his parents, specified that a $1,000 deposit was to be held in escrow by "Closing Agents." Additionally, Respondent represented to Ms. Falstad that the $1,000 deposit was being maintained in an escrow account. Pursuant to the terms of the contract, Respondent applied for a V.A. mortgage loan, but was later determined to be ineligible. Subsequent thereto, on or about February 8, 1984, application was made with Residential Financial Corporation (RFC), to obtain financing to purchase the 608 Hillcrest Street property. The application was in the name of the Respondent's parents, with Respondent handling the matter on their behalf. Thereafter, the Respondent requested that the loan officer (Charlyne Becker) at RFC not submit the loan application for approval to the underwriters. Pursuant to his request, the application was not submitted for approval. The transaction did not close. Subsequent to the scheduled date of closing both Ms. Falstad and Ms. Nutt made demands of the Respondent for forfeiture of the $1,000 deposit, due to their belief that, he had breached the contract by failing to secure financing. It was not until after the scheduled closing date that the sellers learned the $1,000 was not in escro. To date, Respondent has neither deposited the $1,000 in any trust account nor paid any money to the sellers. Respondent admits through his own testimony, that he did not make the deposit, nor was the deposit placed in any escrow account by his parents. Respondent's testimony, which was not rebutted, established that he and his parents sought to purchase the 608 Hillcrest Street property and that adjacent to it for rental purposes. However, they were advised by the RFC loan officer (Charlyne Becker) that the applications were not likely to be approved by RFC. Respondent did not thereafter pursue any of the loan applications.
Recommendation Based on the foregoing, it is RECOMMENDED that Petitioner enter a Final Order fining Respondent $500. DONE and ENTERED this 12th day of July, 1985 in Tallahassee, Florida. R. T. CARPENTER, 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 12th day of July, 1985. COPIES FURNISHED: James R. Mitchell, Esq. Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Louis S. Okoniewski 730 Lake View Avenue, N.E. Atlanta, Georgia 30308 Harold Huff. Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esq. General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 ================================================================ =
The Issue The issues for determination are whether Respondent violated Section 475.25(1)(s), Florida Statutes,1 by having a registration for a state license revoked and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent is licensed as a real estate sales person under license number 0532841. Respondent's license is issued c/o Pan American Equities, Inc., 35725 Tanglewood Drive, Eustis, Florida, 32726. Respondent is also licensed as a mortgage broker. He earns his living as a real estate broker and as a mortgage broker. Prior to January 5, 1996, Respondent was licensed as an insurance agent by the Florida Department of Insurance (the "Department") pursuant to license number 589181909. Sometime prior to January 5, 1996, Respondent had terminated his involvement in the business of insurance and had become employed as a real estate salesman and as a mortgage broker. On December 11, 1995, the Department filed a 16 page administrative complaint against Respondent alleging violations in five separate counts. At the time, Respondent was employed full time as a real estate salesman and mortgage broker and was preoccupied with his wedding plans. On January 5, 1996, Respondent voluntarily surrendered his insurance license and signed a settlement stipulation for a consent order. On January 9, 1996, the Department entered a consent order. The settlement stipulation and consent order are analogous to a plea of convenience. Respondent did not admit to the allegations in the administrative complaint filed by the Department. In relevant part, the settlement stipulation stated: . . . The Department conducted an investigation of the Respondent in his capacity as an insurance agent. As a result thereof, the Department alleges that the Respondent made material misrepresentations in surplus lines business and engaged in illegal premium financing and sliding. (emphasis supplied) * * * . . . By execution of this Settlement Stipulation For Consent Order and by entry of the subsequent Consent Order in this case, the Department and the Respondent intend to and do resolve all issues which pertain to the matters raised in the Department's investigation. (emphasis supplied) Like the settlement stipulation, the consent order contains no admission of guilt by Respondent. The consent order states, in relevant part: . . . The Settlement Stipulation for Consent Order dated January 5, 1996, is hereby approved and fully recorded herein by reference. . . . The licenses and eligibility for licensure and appointment of the Respondent . . . as an insurance agent in this state are hereby surrendered to the Department . . . . . . . The surrender . . . shall have the same force and effect as a revocation pursuant to Section 626.641(4). Respondent surrendered his insurance license because he no longer needed it as a real estate agent and as a mortgage broker. Respondent was not represented by counsel and was not fully informed that the surrender of his insurance license would jeopardize his real estate license. When Respondent learned that the surrender of his insurance license threatened his real estate license, Respondent retained counsel. Counsel moved to vacate the Department's consent order. The Department denied Respondent's motion.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Section 475.25(1)(s) and reprimanding Respondent for doing so. RECOMMENDED this 21st day of February, 1997, in Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of February, 1997.
