Findings Of Fact At all times relevant hereto, Respondent, Ralph A. Call, held real estate broker's license number 0012490 issued by Petitioner, Department of Professional Regulation, Board of Real Estate. Respondent was active broker for a real estate firm located at 1648 Periwinkle Way, Sanibel Island, Florida. At an undisclosed time Respondent purchased Apartment 503, Sandlefoot Condominiums, located on Sanibel Island and later sold it to Eric and Enid Winson. As part of the purchase price, Call agreed to take back two unsecured notes totaling $43,211.73. In February, 1979, the Winsons listed the condominium through Respondent's office. It was agreed that Respondent would obtain all or partial satisfaction of the notes from the proceeds of the sale. On or about March 9, 1979, the Winsons entered into a contract to sell Wolf and Marie Fudikar the condominium for a price of $107,000. Under the terms of the contract, the buyers gave Respondent a $10,690 cash deposit to be held in escrow pending the completion of the sale. The contract also required the sellers to deliver a marketable title to the property. A closing date was set for on or before June 21, 1979. The buyers were represented by Henry Norton, an attorney in Miami, Florida, who was given power of attorney since the Fudikars resided in West Germany. By mutual agreement of the parties, they verbally agreed to change the closing date to Friday, July 20, 1979. It was understood that the buyers would wire the money from Switzerland to Norton in Miami, who would then wire the money to a representative of Gulf Abstract Company in Fort Myers, in whose offices the closing was to be held. When no money was received, a representative of Gulf Abstract telephoned Norton that afternoon end was advised that Norton had not received the money from his clients and could not close. Respondent construed the failure of the buyers to close on that date as a possible breach of the contract. A written standard title insurance binder was issued by Gulf Abstract for the July 20 closing. Although this commitment did not insure marketability, a representative of the firm could not recall any material exclusions or exceptions set out in the policy. The following Monday or Tuesday after the scheduled July 20 closing, a local lending institution filed a lis pendens on the property and instituted a suit against the sellers for defaulting on another debt. Because of this cloud on the title, and other problems which arose, the buyers then reneged on their agreement since no marketable title could be furnished by the sellers. After the sale fell through, both the buyers and sellers made claims for the deposit, each alleging that the other had breached the contract. Upon the advice of counsel, Respondent refused to return the deposit to the buyers since he could also be held liable to the sellers. Respondent finally contacted the Board's District Office in Fort Myers at a later undisclosed time seeking advice on what to do. He was told to call Tallahassee to get an opinion. He then made several telephone calls and wrote letters to various Department representatives or attorneys on December 4, 1980, January 17, 1981, February 19, 1981 and February 28, 1981 requesting that a disbursement order be issued. On March 17, 1981, the Board of Real Estate issued an escrow disbursement order and held, inter alia, that under the terms of the contract closing was to occur no later than June 21, 1979, that no written modification of the terms regarding closing was made, that the sellers were unable to deliver clear title by June 21, and that because of this no contract for sale existed between the parties, and the buyers were not obligated to perform it accordingly ordered Call to disburse the deposit to the buyers. The order also noted that the Order ". . .(did) not provide (Call) with any immunity to any civil liability." On March 31, 1981, Call wrote the Board the following letter: Please be advised that I wish to appeal your decision because it was not based upon actual facts. Please forward to me any form you may have available for this purpose. I am willing and prepared to appear in person for cross examination if necessary, to get the true facts before your board. Please advise. Yours very truly, /s/ Ralph A. Call Counsel for the Board responded by letter on April 17, 1981, stating that "since the contract for sale was between the Fudickars (sic) and the Winsons, (Call was) not entitled to appeal the Escrow Disbursement Order. . ." and further that the "true facts" had already been presented. Upon the advice of his attorney, Call did not comply with the order for fear of liability to the sellers if the deposit was given to the buyers. On March 16, 1982, one day prior to the final hearing, Call obtained a cashier's check in the amount of $10,690 made payable to Norton who represented the buyers. During the entire controversy the deposit remained in Call's escrow account. There is no allegation that Call misused the funds or otherwise improperly dealt with the money while the dispute ensued.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Ralph A. Call, be found guilty as charged in Count II of the Administrative Complaint and be given a public reprimand. DONE and ENTERED this 16th day of April, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1982.
The Issue At issue in this proceeding is whether respondent committed the offense alleged in the amended administrative complaint and, if so, what disciplinary action should be taken.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate, is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Carolee Harse, is now, and was at all times material hereto, a licensed real estate broker in the State of Florida, having been issued license number 0493946. The last license issued was as a broker- salesperson with William S. Frank Associates, Inc., 120 U.S. Highway 1, Tequesta, Florida 33469. In August 1993 respondent showed a home to Mr. and Mrs. Jose Manzo that had been listed with the Multiple Listing Service by Jupiter By The Sea, a brokerage business in Jupiter, Florida. The house was owned by Mr. and Mrs. David Couch and Cynthia Nixon. Effective August 11, 1993, respondent obtained a contract between the Manzos, as buyers, and Couch/Nixon as sellers. Pursuant to the contract, the buyers' initial deposit of $200 was held in escrow by respondent's broker, William S. Frank Associates, Inc., and an additional escrow deposit of $3,000 was to be made by the buyer within five days of the effective date of the contract, to wit: by August 18, 1993. 1/ Following execution of the contract, the Manzos returned to their home in Mexico; however, they were scheduled to return on August 16, 1993, and arrangements were made for them to meet with respondent on August 17, 1993, to make the additional deposit. Unfortunately, Mrs. Manzo apparently required surgery while in Mexico, and Mr. Manzo did not return until the evening of August 17, 1993. Respondent spoke with Mr. Manzo by telephone the evening of August 17, 1993, and an appointment was made for him to meet with her broker, Mr. Frank, on August 18, 1993, to make the additional deposit. As respondent explained to Mr. Manzo, she would be out of town on August 18, and her broker would take care of the deposit. Indeed, respondent did have plans to be out of town on that date, and those plans had been made well prior to the subject contract. In this regard, the proof demonstrates that respondent and her husband had prior plans to attend a class reunion in Long Island, New York, and that they left Florida at 6:29 a.m., August 18, 1993, and did not return until late afternoon Sunday, August 22, 1993. Respondent advised the listing agent at Jupiter By The Sea that she would be out of town that week, and that Mr. Frank was scheduled to meet with Mr. Manzo on February 18 to receive the additional deposit. Upon her Sunday return, respondent telephoned Mr. Frank and learned that Mr. Manzo had not made the additional deposit. The next day, respondent spoke with the listing agent by telephone, and advised her that the additional deposit had not been made. 2/ Respondent also advised the agent that she would follow up with the Manzos and try to secure the additional deposit; however, such efforts to secure the additional deposit failed, and by August 25, 1993, it was evident that the Manzos would not proceed with the purchase. Although Respondent promptly advised the listing agent that the additional deposit had not been made, she did not personally undertake to notify the sellers. Rather, she assumed the listing agent would, in turn, notify that agent's client. Such assumption, given the circumstances, was reasonable. Standard of Practice 21-18 of the National Association of Realtors, received into evidence without objection, provides: All dealings concerning property exclusively listed, or with buyer/tenants who are exclusively represented shall be carried on with the client's agent, and not with the client, except with the consent of the client's agent. Petitioner offered no proof, either by rule or community standard, which would have placed a different obligation on respondent. Accordingly, there being no proof to the contrary, it is found that respondent's notification to the listing agent was appropriate, and she was under no obligation to also notify the sellers. Rather, that obligation rested with the listing agent. 3/
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered which dismisses the amended administrative complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of October 1994. WILLIAM J. KENDRICK 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 3rd day of October 1994.
The Issue The issue in this case is whether the respondents committed the violations alleged in the Amended Administrative Complaint, and, if so, the penalties which should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular chapters 120, 455, and 475, Florida Statutes, and the rules promulgated thereunder. The Florida Real Estate Commission operates within the Department and is the entity directly responsible for licensing and disciplining those licensed under chapter 475. Section 475.02, Fla. Stat. The Division of Real Estate operates within the Department and assists the Commission in carrying out its statutory duties. Section 475.021, Fla. Stat. Respondent Michael R. Hull is now and was at all times material hereto a licensed Florida real estate broker-sales person, issued license number 0398325 in accordance with chapter 475, Florida Statutes. The Department's records show that Mr. Hull's license is voluntarily inactive. At the times material hereto, he worked out of one of the Fort Lauderdale offices of The Prudential Florida Realty. Respondent Karolyn K. Busby is now and was at all times material hereto a licensed Florida real estate broker, issued license numbers 0152284 and 0272478 in accordance with chapter 475, Florida Statutes. The last licenses issued to Ms. Busby were as a broker c/o CMT Holdings, Inc., 1988 Gulf-to-Bay Boulevard, Clearwater, Florida 34625, and c/o Preferred Rentals, Inc., 19353 U.S. Highway 19 North, Number 100, Clearwater, Florida 34624. At all times material hereto, Ms. Busby was licensed and operating as qualifying broker and officer of respondent CMT Holdings, Inc. Respondent CMT Holdings, Inc., is and was at all times material hereto a corporation registered as a Florida real estate broker, issued license numbers 0266412 and 0266434 in accordance with chapter 475, Florida Statutes. The last licenses issued were at 1988 Gulf-to-Bay Boulevard, Clearwater, Florida 34625, and as a partner to CMT Holding, Limited, t/a The Prudential Florida Realty, 19353 U.S. Highway 19 North, Number 100, Clearwater, Florida 34624. Respondent CMT Holding, Limited, t/a The Prudential Florida Realty, is, and was at all times material hereto, a limited partnership registered as a Florida real estate broker, having been issued license number 0266433 in accordance with chapter 475, Florida Statutes. The last license issued was at 19353 U.S. Highway 19 North, Number 100, Clearwater, Florida 34624. Blucher/Gautier transaction: Counts I, II, III, IV, V, VI, and VII of the Amended Administrative Complaint Carol R. Blucher listed for sale her condominium apartment, number 405 of Harbor Haven, located in Fort Lauderdale, Florida. Deborah H. Burns and her broker, Elizabeth T. Beauchamp, were the seller's and listing agents for Ms. Blucher's condominium, and Intercoastal Realty, Inc., was the listing office. On January 1, 1994, Jacques and Aimee Gautier executed a Deposit Receipt and Contract for Purchase and Sale of Ms. Blucher's condominium. The contract disclosed that Intercoastal Realty was the listing office for the transaction and that The Prudential Florida Realty was the selling office. Michael R. Hull signed the contract as an associate of The Prudential Florida Realty. In the contract, Mr. Hull acknowledged receiving as a deposit a check in the amount of $500; Mr. Hull accepted this check on behalf of The Prudential Florida Realty for deposit in its escrow account. The contract provided that the transaction would close on or before February 28, 1994, and that Mr. and Mrs. Gautier would make an additional deposit of $7,000 within seven days of acceptance of the contract. The additional deposit was to be held by The Prudential Florida Realty in its escrow account. The Gautiers were to wire the $7,000 to the Clearwater office of The Prudential Florida Realty, since the accounting department, which handles the escrow accounts, was located in that office. Mr. Hull hand-delivered the executed Deposit Receipt and Contract for Purchase and Sale to Ms. Burns, together with a letter dated January 3, 1994. In this letter, Mr. Hull requested certain information from Ms. Burns relative to the transaction, and he informed her that Mr. and Mrs. Gautier intended to wire the additional $7,000 deposit and that he would confirm receipt with her. Ms. Burns, in turn, conveyed the contract to Ms. Blucher, who accepted the offer on January 4, 1994, by executing the contract. The executed contract was delivered to Mr. Hull on January 7, and both Mr. Hull and Ms. Burns considered January 13 to be the date on which the additional deposit was due. Mr. Gautier told Mr. Hull that the additional deposit would be wired on January 10. On January 13, Mr. Hull was told by the bookkeeper in the Clearwater office of The Prudential Florida Realty that the transfer of the $7,000 had not been confirmed. For several days thereafter, Mr. Hull was in daily contact with the bookkeeper because he feared that there had been an error in the wire transfer. The transfer of the $7,000 was not confirmed as of January 21. Mr. Hull made several attempts to contact Mr. Gautier after January 13. When he finally got in contact with him, Mr. Gautier promised Mr. Hull that he would wire the $7,000 deposit "the next day." The transfer of the $7,000 deposit to The Prudential Florida Realty was not confirmed by January 31, and Mr. Gautier did not respond to Mr. Hull's further attempts to contact him. In letters dated January 13, 21, and 31, 1994, Mr. Hull advised Ms. Burns, Ms. Blucher's selling and listing agent, of the status of his efforts to secure the additional deposit and of Mr. Gautier's responses or lack thereof. These letters were properly addressed and sent either by facsimile transmittal or by United States mail on the date shown on the letters or on the day after. Mr. Hull was in San Diego, California, from February 2 through 9, 1994, attending a realtors' conference, and his next contact with Ms. Burns was on February 15 or 16, when they spoke by telephone. During that conversation, Mr. Hull advised Ms. Burns that the transfer of the $7,000 deposit to The Prudential Florida Realty had not been confirmed by the Clearwater office and that Mr. Gautier would not respond to repeated attempts to contact him. Ms. Burns waited until on or about February 22, a week before the February 28 closing date, to notify Ms. Blucher that the Gautiers had not made the additional $7,000 deposit. Ms. Blucher was "flabbergasted." Although she had not directly asked Ms. Burns about the status of the deposit, she assumed the deposit had been received because Ms. Burns had not told her anything to the contrary. Throughout the course of this transaction, Ms. Burns dealt exclusively with Ms. Blucher as selling and listing agent, and Mr. Hull dealt exclusively with Ms. Burns. Mr. Hull did not deal directly with Ms. Blucher because he believed that it would be unethical if he did so. However, he kept Ms. Burns fully informed about the status of the transaction and assumed she was passing the information on to her client. For her part, Ms. Blucher considered Ms. Burns her realtor and expected to deal exclusively with her and to be kept informed with regard to this transaction. By advising Ms. Burns that the $7,000 additional deposit had not been received within the time specified in the contract and by keeping her informed of his attempts to secure the deposit, Mr. Hull fulfilled his duty to Ms. Blucher to disclose information material to the transaction. The Department offered no proof that, by statute, rule, or industry practice, Mr. Hull was required to inform Ms. Blucher of the status of the deposit directly rather than indirectly through her agent, Ms. Burns. Under the circumstances, Mr. Hull was justified in relying on Ms. Burns to communicate with her client. The proof is not sufficient to establish that Mr. Hull was culpably negligent or committed a breach of trust with regard to this transaction. Scarborough/Krathen transaction: Counts VIII, IX, and X of the Amended Administrative Complaint On June 18, 1993, Patrice Scarborough accepted the offer of Stephen and Mary Krathen to purchase her home in Fort Lauderdale, Florida. The offer was made in a Deposit Receipt and Contract for Sale and Purchase executed by Howard Scott, attorney for Dr. and Mrs. Krathen. The agent who prepared the contract was Sidney White of The Prudential Florida Realty. Ms. Scarborough had listed the property with Sunrise Realty, and Robert F. Mann was acting as her selling agent. In accordance with the terms of the contract, Mr. Scott tendered a check made payable to The Prudential Florida Realty in the amount of $1,000 as a deposit and partial down payment on the subject property. The check was dated June 18, 1993, and the contract shows the acknowledgment of Sidney White that, on June 18, 1993, he received $1,000 as an associate of The Prudential Florida Realty. In the contract, the Krathens, through Mr. Scott, agreed to tender an additional deposit of $44,000, with $9,000 payable on or before June 22, 1993, and $35,000 payable on or before June 29, 1993. The Krathens did not remit either the additional $9,000 or the additional $35,000 deposits, and they were in default of the contract as of June 29, 1993. In July 1993, Ms. Scarborough authorized Mr. Mann to demand the $1,000 deposit on her behalf. Mr. Mann immediately telephoned Mr. White and advised him that Ms. Scarborough felt she was entitled to the $1,000 deposit because the Krathens had defaulted on the contract by failing to remit the additional $44,000 deposit. Mrs. Krathen knew shortly after the contract was entered into that she would not be able to obtain the financing necessary to purchase the Scarborough home. She contacted The Prudential Florida Realty in July 1993 and verbally requested the return of the $1,000 deposit. After demanding the $1,000 on behalf of Ms. Scarborough, Mr. Mann was in regular contact with Mr. White with regard to the deposit. Mr. Mann and Mr. White enjoyed a good working relationship, and Mr. Mann knew that Mr. White had repeatedly tried to contact Dr. Krathen and his attorney, Mr. Scott, and had gotten no response. Meanwhile, shortly after authorizing Mr. Mann to demand the $1,000 deposit, Ms. Scarborough learned that the Krathens had previously declared bankruptcy and that, once the bankruptcy was removed from their credit report, their chances of being approved for financing would improve. Ms. Scarborough told The Prudential Florida Realty that she was willing "to go along with" Dr. Krathen in his attempts to resolve the bankruptcy issue, but the contract for purchase and sale was not modified, Ms. Scarborough did not take her home off the market, and she did not rescind her demand for the $1,000 deposit. During this time, Ms. Scarborough spoke several times directly with Sidney White and was kept informed by The Prudential Florida Realty of the status of the Krathen's attempts to secure financing. Although he cannot recall the exact date, at some point Mr. Mann telephoned Joan Sher and told her of the problems he was having getting the matter of the $1,000 deposit resolved. Ms. Sher was the broker and branch manager responsible for The Prudential Florida Realty's Fort Lauderdale office out of which Mr. White worked. Mr. Mann made a formal demand to Ms. Sher for arbitration of the deposit dispute. On December 13, 1993, Ms. Sher received a written demand for the deposit from Mr. Scott, the attorney acting on behalf of Dr. Krathen. Ms. Sher then prepared a Notice of Escrow Dispute/Good Faith Doubt, dated December 14, 1993, in which she identified Kay Rehard Busby as the broker for the Scarborough/Krathen transaction. In Ms. Busby's absence and with her authorization, Ms. Sher signed the Notice of Escrow Dispute/Good Faith Doubt "Kay Rehard Busby" and included her initials under the signature line to indicate that she had signed on Ms. Busby's behalf. At the times material to this proceeding, Ms. Busby was the broker and general manager responsible for the eight branch offices of The Prudential Florida Realty located in Broward County. On December 22, 1993, Gerri Barnoske, of the Division of Real Estate, sent a letter to Ms. Busby advising her that the Notice of Escrow Dispute/Good Faith Doubt had been received by the Division on December 20. The letter further advised Ms. Busby that, within fifteen days from the date the form was received by the Division, she must either arrange for arbitration of the dispute, put the matter before a civil court, arrange for mediation, or request an Escrow Disbursement Order from the Florida Real Estate Commission. On the Notice of Escrow Dispute form, there is a space marked "Optional" which can be checked to request the Division to send the paperwork necessary to request an escrow disbursement order. This space was not checked on the form prepared by Ms. Sher, and the Division did not send the paperwork necessary to request an escrow disbursement order. Ms. Sher thought that she had requested the necessary paperwork to request an escrow disbursement order when she submitted the Notice of Escrow Dispute to the Division of Real Estate. She had made an entry on her tickler system, and, when the tickler came up and she realized that she had not received the paperwork, she telephoned the Division. She was told to submit a request for the paperwork in writing. She did so in a letter dated January 20, 1994. The necessary paperwork was sent by the Division on January 26, 1994, and the completed Request for Escrow Disbursement Order form was received by the Division on February 4, 1994. The Request for Escrow Disbursement Order was prepared from information provided by Mr. White, and he identified July 15, 1993, and July 24, 1993, as the dates on which the conflicting Krathen and Scarborough demands were received. The form was reviewed by Ms. Sher, and signed "Kay Rehard Busby," as the requesting broker, "By Joan C. Sher." Ms. Sher signed Ms. Busby's name in her absence and with her authorization. On June 22, 1994, the Florida Real Estate Commission issued an Escrow Disbursement Order, ordering that the $1,000 deposit be paid to Ms. Scarborough. The funds were disbursed in accordance with the order. The evidence is clear and convincing that, even though Dr. Krathen's attorney did not respond to his messages or make a written demand for the deposit until December 13, 1993, Mr. White was aware by mid-July 1993 that Mrs. Krathen and Ms. Scarborough had made conflicting demands for the $1,000 deposit held in escrow by The Prudential Florida Realty. Accordingly, the proof establishes that Ms. Sher, acting on Ms. Busby's behalf, did not promptly submit the Notice of Escrow Dispute/Good Faith Doubt to the Division of Real Estate; rather, the notice was submitted approximately five months after it became known that there was a dispute. The responsibility to notify the Division was not obviated by Ms. Scarborough's willingness to "go along" until December to see if the Krathens were able to clear up their bankruptcy problems and obtain financing. In addition, the evidence is clear and convincing that none of the four alternatives available to resolve the escrow dispute was instituted promptly after notifying the Division of the dispute. Silberzweig/Vargas transaction: Counts XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, and XIX of the Amended Complaint On December 7, 1993, the personal representative of the Estate of Cecelia Silberzweig accepted the offer of Edna Vargas to purchase a condominium apartment, number 110, Building 1-J, Oriole Gold and Tennis Club, located in Margate, Florida. In the Deposit Receipt and Contract for Purchase and Sale, Ms. Vargas agreed to make an initial deposit of $500, which was received by Jean Gilchrist, as an associate of The Prudential Florida Realty. 1/ Ms. Vargas also agreed to make an additional deposit of $3,000, payable upon acceptance of the contract. The personal representative of the Estate of Cecelia Silberzweig accepted the offer to purchase on December 7, 1993, and the additional $3,000 deposit was received by The Prudential Florida Realty and deposited in its escrow account. Pursuant to the contract, the transaction was to close on or before December 10, 1993. An Addendum to the contract, executed by Ms. Vargas on December 11 but not executed by the seller, purported to extend the closing date until December 20, 1993. Notwithstanding the purported extension, Ms. Vargas requested that her interview with the condominium association be scheduled on December 23, 1993. 2/ The closing did not take place on either December 10 or December 20. On January 25 or 26, 1994, Joanna (White) Youngblood received a letter from the attorney for Ms. Vargas demanding the return of the $3,500 deposit. Ms. Youngblood also received a letter from the seller demanding the deposit. At the times material to this proceeding, Ms. Youngblood was the broker for the Fort Lauderdale office of The Prudential Florida Realty out of which Ms. Gilchrist worked. Both before and after the demand letters were received, the transaction was "on again, off again." However, for reasons which are not clear from the record, the transaction never closed. At the times material to this proceeding, Ms. Busby was the broker and general manager for The Prudential Florida Realty's Broward County offices. On February 4, 1994, she personally signed a Notice of Escrow Dispute/Good Faith Doubt form with regard to the $3500 deposit at issue in the Silberzweig/Vargas transaction. She did not check the option on this form to request that the Division of Real Estate send her the paperwork necessary to request an escrow disbursement order. On February 16, Gerri Barnoske, of the Division of Real Estate, sent a letter to Ms. Busby advising her that the Notice of Escrow Dispute/Good Faith Doubt had been received by the Division on February 10. The letter further advised Ms. Busby that, within fifteen days from the date the form was received by the Division, she must either arrange for arbitration of the dispute, put the matter before a civil court, arrange for mediation, or request an Escrow Disbursement Order from the Florida Real Estate Commission. On March 28, 1994, the Division of Real Estate received a Notice of Settlement Procedure for Escrow Dispute indicating that interpleader or other court action "has been instituted" in the Silberzweig/Vargas escrow dispute. The form was prepared by Joanna Youngblood, who signed the form "Karolyn Kay Busby, G.M. (by JWY)." The form was signed by Ms. Youngblood in Ms. Busby's absence and with her authorization; the signature was dated March 8, 1994. At the time the form was submitted to the Division, no interpleader or other court action had been instituted. When she submitted the Notice of Settlement Procedure for Escrow Dispute to the Division, or shortly thereafter, Ms. Youngblood contacted the attorney for Ms. Vargas to advise him that she intended to turn the matter over to the courts. Ms. Vargas's attorney asked that she request an Escrow Disbursement Order rather than go to court. As a result, Ms. Youngblood called the Division's Orlando office to request the paperwork necessary to request an escrow disbursement order. After calling twice, she finally received a form, but it was a Division of Real Estate Uniform Complaint Form. Even though she knew it was not the proper form, Ms. Youngblood gave the Complaint Form to Jean Gilchrist, the associate who had been involved with the transaction. Ms. Gilchrist completed and signed the form; her signature was dated May 20, 1994. The form also carries the signature "Kay Busby G.M. (by JWY)." Ms. Youngblood signed the form for Ms. Busby in her absence and with her authorization. Ms. Youngblood was subsequently advised by Don Piersol, an investigator with the Division's Fort Lauderdale office, that she had submitted the wrong form. She obtained the correct form, and, in a letter to Ms. Barnoske dated June 17, 1994, signed "Kay Busby (JWY)," she enclosed a Request for Escrow Disbursement Order, asking that the request be expedited. On February 27, 1995, the Florida Real Estate Commission issued an Escrow Disbursement Order, ordering that the $3,500 deposit be paid to Ms. Vargas. The funds were disbursed in accordance with the order. The proof is not sufficient to establish that Ms. Busby was culpably negligent with regard to the Silberzweig/Vargas transaction, or that she committed a breach of trust. Additionally, the proof affirmatively establishes that Ms. Busby timely notified the Division of the conflicting demands made for the deposit. However, the evidence is clear and convincing that those acting on Ms. Busby's behalf, and with her authorization, failed to implement promptly any of the four alternative procedures available to resolve the escrow dispute. Ms. Youngblood represented to the Division in March that an interpleader or other court action had been instituted, when, in fact, no such action had been filed. The evidence is also clear and convincing that none of the other alternatives available to resolve the escrow dispute was instituted promptly after notifying the Division of the dispute. This failure is not excused by Ms. Youngblood's confusion with regard to the proper procedure for requesting the appropriate forms.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order Finding respondents Karolyn K. Busby, CMT Holdings, Inc., and CMT Holding, Limited, t/a The Prudential Florida Realty, guilty of violating rule 61J2-10.032, Florida Administrative Code, and section 475.25(1)(e), Florida Statutes, as charged in the Amended Administrative Complaint, Counts VIII, IX, and X, with respect to the Scarborough/Krathen transaction, and Counts XVII, XVIII, and XIX with respect to the Silberzweig/Vargas transaction; Imposing administrative penalties consisting of A reprimand of Karolyn K. Busby, CMT Holdings, Inc., and CMT Holding, Limited, t/a The Prudential Florida Realty, and An administrative fine against Karolyn K. Busby in the amount of two thousand dollars ($2,000); and Dismissing Counts I through VII and Counts XI through XVI of the Amended Administrative Complaint. DONE AND ENTERED this 30th day of May, 1996, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1996.
The Issue The issues presented herein are whether or not the Respondent, Maria M. Drummond Mulgrave, failed to account and deliver monies received in a trust or escrow bank account monies received as a deposit for realty in a real estate transaction in violation of Subsections 475.25(1)(d), Florida Statutes, and by reason thereof, Respondent engaged in acts and/or conduct amounting to fraud, is representation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings. During times material herein, Respondent, Maria M. Drummond Mulgrave, was a licensed real estate salesperson and has been issued license number 0396817. Respondent's last issued license was as a salesperson and she worked through the entity, Welsh International Realty, Inc., 4684 NW 183 Street, Miami, Florida 33155. Respondent, in her capacity as a salesperson, on January 31, 1984, was the selling agent who executed a purchase, sales contract and receipt for deposit for purchasers Michael A. and Marjorie Bucknor for a residence situated at 240 NW 203 Terrace, Miami, Florida. The seller of that property was Equitable Relocation Management Corporation (Equitable). Equitable executed the sales contraction February 7, 1984. On January 31, 1984, Respondent Mulgrave received in trust a $1,000 earnest money deposit which was held in an escrow account by her broker, Welsh International Realty, Inc. In connection with the January 31, 1984 sales contract, the purchasers were to tender to the Respondent an additional $6,500 deposit within 5 days of acceptance by the seller or, in this case, on February 12, 1984, inasmuch as Equitable approved and executed the sales contract on February 7, 1984. (Petitioner's Exhibits 1 and 2) 3/ Petitioner has alleged that the listing agency, Associates Realty Company (Associates), requested from the Respondent on March 11 and March 19, 1984, an escrow letter verifying that the additional escrow deposits had, in fact, been made. It is also alleged that the Respondent verbally assured Associates that the entire deposit of $7,500 was in escrow and that the sale would close, but Respondent did not then provide Associates the promised escrow letter. It is also alleged that Associates relied upon Respondent's statements that the deposit was in escrow and that it was not until approximately April 17, 1984 that Respondent admitted to Associates Realty that only $1,000 was in escrow. (Petitioner's Exhibit 3) As stated, Respondent Oswald S. Welsh entered into a stipulated settlement and is no longer a Respondent in these proceedings. Sometime following the execution of the sales/deposit receipt contract by the Bucknors and the sellers, Equitable Relocation Management Corporation, by its agent Claire Smith, Respondent Mulgrave left the Miami area and gave the pending sales contracts to her sponsoring broker, Oswald S. Welsh. Marcia Mize was, during times material herein, the processing supervisor for the listing agency, Associates Realty. Once Ms. Mize began processing the Bucknor contract, she commenced making inquiries from Welsh International Realty, Inc. trying to get the needed verifications of income, etc. to the mortgage company such that the purchasers could be processed and a commitment letter issued. Ms. Mize made several oral requests of Welsh International Realty for verification of the escrow deposits from approximately February 7, 1984 through March 9, 1984. On March 17, 1984, Ms. Mize learned (from Respondent) that Welsh Realty only had $1,000 in escrow. Oswald S. Welsh, the broker for Welsh International Realty, Inc., by letter dated January 31, 1984, advised Associates Realty that Welsh was holding $1,000 in escrow from the Bucknors toward the purchase of the subject property. Marcia Mize was unsure if Respondent Mulgrave advised her that she had the additional $6,500 in deposits. Ms. Mize testified that she spoke with several secretaries employed by Welsh International Realty but she was unable to verify that she determined that it was Respondent Mulgrave who advised that the additional $6,500 deposit was in escrow with Welsh International Realty, Inc. Respondent Mulgrave later determined that the Bucknors were having marital and financial problems and, as a result, were unable to close on the transaction as agreed in the purchase/sales contract. Respondent Mulgrave denies that she, at any time, advised Marcia Mize of Associates Realty that she had the $6,500 which represented the balance of the remainder of the downpayment by the Bucknors in the purchase of the residence from Equitable. Respondent Mulgrave turned this transaction over to her sponsoring broker, Oswald S. Welsh when she had to leave the Miami area to attend to some pending family business. The Bucknors did not give Welsh International Realty, Inc. the remaining $6,500 escrow deposit which represented the remainder of their downpayment toward the purchase of the subject residence.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby recommended that the administrative complaint filed herein against Respondent, Maria M. Drummond Mulgrave, be DISMISSED. RECOMMENDED this 18th day of September, 1985, in Tallahassee, Florida. JAMES E. BRADWELL 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 18th day of September, 1985.
The Issue The issue presented is whether Petitioners are entitled to recover from Respondent the attorney's fees and costs incurred by Petitioners, pursuant to the Florida Equal Access to Justice Act.
Findings Of Fact At the time material hereto, Global Real Estate and Management, Inc., was a corporation registered as a real estate broker in the state of Florida, Mark H. Adler was a real estate broker licensed in the state of Florida, and Richard Shindler was a real estate salesman licensed in the state of Florida. Adler was the qualifying broker for Global, and Shindler was employed by Global. On November 17, 1989, the Department of Professional Regulation, Division of Real Estate, received a written complaint about Adler, Shindler, and Global from Jay Hirsch, a real estate broker licensed in the state of Florida. Hirsch's complaint included the following allegations. Shindler had entered into two contracts for the purchase of real estate which required Shindler to place a total of $11,000 in Global's escrow account. Requests for verification of the deposit of such funds had been ignored. Hirsch had told Shindler at the time that the contracts were executed and on numerous occasions thereafter that since Shindler had chosen to participate in the real estate commission to be earned from the transaction, Shindler had assumed a fiduciary relationship with the sellers. Shindler had arbitrarily refused to close pursuant to the contracts and on October 2, 1989, Hirsch met with Shindler, reminded Shindler of Shindler's fiduciary responsibil-ities to the sellers, made demand on Shindler for the escrow deposit on behalf of the sellers, and advised Shindler of the provisions of Florida law relating to the responsibilities of the escrow holder when demands are made for release of escrowed money. Written demand was made on Adler within days of the oral demand. Hirsch subsequently spoke with Adler, the broker of record for Global, regarding the legal requirements in escrow deposit disputes but discovered that Adler "knew nothing" about the transaction. Shindler and Adler continued to ignore the demands made on them for the escrow deposit. Hirsch also alleged that there may be "certain other irregularities" regarding fiduciary responsibilities, entitlement to commissions by Global, and conflicts of interest. An investigator was assigned to investigate Hirsch's complaint against Adler, Shindler, and Global. According to the investigative report issued on February 12, 1990, that investigation revealed possible serious violations of the laws regulating the conduct of real estate brokers and salespersons. Although the investigative report recited that Global waited two months after the initial deposit demand was made by Hirsch before it filed an interpleader action to resolve conflicting demands on the escrow deposit, the documentation attached to the investigative report clearly indicated that Global waited just a few days short of three months before filing the interpleader action. The investigative report further revealed that during the time that at least the $11,000 was required to be in Global's escrow account (if Global were not involved in any other real estate transactions at the time), the escrow account had less than an $11,000 balance for both the months of September and October of 1989. The report further indicated that the IRS had attached Global's escrow account for Global's failure to pay payroll taxes. The investigative report revealed that there had been a problem obtaining broker Adler's presence for the interview with the Department's investigator. When a joint interview with both broker Adler and salesman Shindler did take place, the broker was unable to answer any of the investigator's questions, telling the investigator that he knew little regarding the problems since he relied on salesman Shindler to operate the business on a daily basis. In response to the investigator's continued questioning as to how IRS was able to attach an escrow account, Shindler explained that although the checks were marked escrow account, the bank statements did not reflect an escrow account but rather reflected a "special account." It was further discovered during the investigation that broker Adler had not been a signatory on the escrow account; rather, salesman Shindler had been the only signatory on the escrow account. At the conclusion of that interview, Shindler, who had taken control of the interview, agreed to supply the Department's auditors with all IRS and bank correspondence relative to the escrow account attachment. During that same joint interview on January 23, 1990, when questioned about the real estate transactions which were the subject of broker Hirsch's complaint, Shindler spoke in terms of having "his" attorney file an interpleader action (although he was the buyer). He also talked about oral extensions to the written contracts. Shindler also explained that his "deposit moneys" were in the escrow account because he was using a part of sale proceeds belonging to his brother as his down payment on purchases made for himself, an explanation which suggested there might be co-mingling of funds. A complete audit of Global's escrow account by the Department's auditors was scheduled for February 7, 1990. A supplemental investigative report was issued on May 3, 1990. That report contained the following recital. Shindler and Adler had failed to comply with the Department's requests for files and bank statements so that an audit could be conducted on the escrow and operating accounts. On March 22, 1990, a subpoena was served on Global requiring those records to be made available by April 3. As of April 30, complete records were still not submitted in that case files were not available and certain checks and monthly bank statements were missing. Therefore, an appointment was made to conduct the audit in Global's office on May 1 with the requirement that broker Adler be present. On that date, files were still not available and bank records were incomplete, precluding the conduct of a proper audit. Adler told the investigator on that date that Shindler had not even told Adler that a subpoena had been served, which statement reinforced the investigator's belief that salesman Shindler had been operating as a broker and running the business operations of Global, with broker Adler merely lending his license. On that same date Shindler changed his explanation of the escrow account shortages, saying the IRS had not garnished the escrow account; rather, Global's bank had transferred $3,200 from Global's "escrow" account to Global's operating account to cover checks written on Global's operating account when the account did not have sufficient funds. It was also discovered that Adler had not been performing monthly reconciliations of Global's "escrow" account. Adler told the investigator that he would supply files and reconciliations by June 1, 1990. A supplemental investigative report was issued on June 12, 1990, advising that although the subpoena return date had been extended to June 1, 1990, as of June 12 Adler had still failed to respond by producing the required records. On June 19, 1990, the Probable Cause Panel of the Florida Real Estate Commission considered the investigative reports and determined that there was probable cause to believe that Adler, Shindler, and Global had violated statutes regulating the conduct of real estate brokers and salespersons. The administrative complaint recommended to be filed by the Probable Cause Panel was issued by the Department of Professional Regulation, Division of Real Estate, on June 21, 1990, against Mark H. Adler, Richard Shindler, and Global Real Estate and Management, Inc. That Administrative Complaint contained factual allegations regarding Shindler's contracts to purchase properties listed by broker Hirsch, regarding the alleged "verbal" extensions of the closing dates in the written contracts, regarding the repeated demands on broker Adler for release of the escrowed money as liquidated damages, and regarding the lengthy delay in responding to those demands. The Administrative Complaint also contained factual allegations regarding Shindler's use of a part of sale proceeds due to his brother as his own down payment on the properties and regarding the escrow account balance which was less than $11,000, the minimum balance required to be maintained in Global's escrow account if there were no other sales pending. Also included were factual allegations regarding the alleged attachment of Global's escrow account by the IRS for failure to pay payroll taxes, regarding the fact that broker Adler was not a signatory on the escrow account, and regarding Adler's reliance on Shindler to operate the real estate brokerage office on a daily basis. The Administrative Complaint also recited the failure of the Respondents to comply with the subpoena served on Global by the Department, which precluded the possibility of conducting a proper audit of Global's account. Factual allegations were included reciting that on May 1, 1990, Shindler had acknowledged that he had been operating as a broker and running the real estate brokerage business of Global with broker Adler "lending his license." In addition, the Administrative Complaint recited Shindler's original explanation that the IRS had attached the escrow account, which explanation was later changed by Shindler to be that Global's bank had taken $3,200 from Global's escrow account to cover checks written against Global's operating account when there were not sufficient funds in that operating account. Lastly, the Administrative Complaint alleged that Adler had not done monthly reconciliation statements of the escrow account from October of 1989 through the date of the Administrative Complaint. Based upon those factual allegations, the Administrative Complaint alleged that Adler was guilty of culpable negligence or breach of trust in a business transaction (Count I), that Shindler was guilty of culpable negligence or breach of trust in a business transaction (Count II), that Global was guilty of culpable negligence or breach of trust in a business transaction (Count III), that Adler was guilty of having failed to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized (Count IV), that Global was guilty of having failed to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized (Count V), that Adler was guilty of having failed to produce for inspection records when subpoenaed by the Department (Count VI), that Global was guilty of having failed to produce for inspection records when subpoenaed by the Department (Count VII), that Shindler was guilty of having failed to deposit funds with his employing broker (Count VIII), and that Shindler was guilty of having operated as a broker while being licensed as a salesman (Count IX). The Administrative Complaint sought disciplinary action against Adler, Shindler, and Global for those alleged violations. Adler did not seek a formal hearing regarding the allegations contained within that Administrative Complaint. Rather, he entered into a settlement agreement with the Department, agreeing that all of his real estate licenses, registrations, certificates, and permits would be suspended for a period of eighteen months, that he would resign as an officer and/or director of Global, and that he would testify at any formal hearing held regarding the Administrative Complaint. Adler also agreed that notice would be published that he had been suspended for 18 months for culpable negligence and failure to properly supervise a licensed salesman in his employ. That agreement was approved by the Florida Real Estate Commission in a Final Order filed of record on August 31, 1990. On the other hand, Shindler and Global did request a formal hearing regarding the allegations contained in that Administrative Complaint. The matter was subsequently transferred to the Division of Administrative Hearings for the conduct of that formal hearing and was assigned DOAH Case No. 90 That formal hearing was conducted on January 9, 1991. Based on the evidence presented during that final hearing, a Recommended Order was entered on March 20, 1991, finding that the Department had failed to prove its allegations as to Shindler and further finding that the Department had failed in its burden of proof as to two of the three counts against Global. The Recommended Order did find that Global failed to maintain trust funds as alleged in Count V of the Administrative Complaint and recommended that Global be ordered to pay an administrative fine in the amount of $500. That Recommended Order was adopted in toto by the Florida Real Estate Commission in its Final Order filed on April 24, 1991. It is clear that Shindler prevailed in the underlying administrative action and that Global prevailed as to two of the three counts against Global. The Department was substantially justified in initiating the underlying administrative proceeding against both Shindler and Global. At the time that the underlying action was initiated, it had a reasonable basis both in law and in fact.
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what action should be taken.
Findings Of Fact At all times material hereto, Louis M. Loguercio (Respondent) was licensed in the State of Florida as a real estate salesperson, having been issued license number 0609113. From March 11, 1996, through July 13, 1997, Respondent was a salesperson for CMT Holding Ltd., a partnership trading as The Prudential Florida Realty. Martha Meloni and her husband, Mario Meloni, (Sellers) owned residential property located at 6412 Southwest 127 Court, Miami, Florida. The Sellers' property was listed for sale with Jorge "Ivan" Salomon, a broker operating his own company, Real One Realty Corporation. On May 1, 1997, Carlos Castellanos and his wife, Daritza Jiminez, a/k/a Daritza Jiminez-Castellanos, (Buyers) met Respondent at his office at The Prudential Florida Realty. They were referred to Respondent by one of his clients. The Buyers were from Venezuela and had had no contact with Respondent prior to this transaction. On May 1, 1997, Respondent prepared a draft Residential Sale and Purchase Contract (Contract) for the purchase of the Sellers' property for $150,000 by the Buyers. Respondent drafted the Contract on behalf of the Buyers and prepared the contract while the Buyers were in his office. The terms of the Contract required an initial deposit of $2,000 from the Buyers to be held in escrow by Steven Greenspan Law Office, as "Escrow Agent." The Contract also required a $13,000 additional deposit to be made within ten (10) days of the date of the Contract. While the Buyers were in Respondent's office, they wrote two checks, and signed them, for deposits on the property: one for $2,000 dated May 1, 1997, and one for $13,000 dated May 15, 1997. The checks were made payable to Alan Greenspan, P.A. The Buyers wrote both checks with Respondent's assistance. The Buyers wanted to personally take the $2,000 deposit check to Alan Greenspan, the escrow agent. The Buyers permitted Respondent to photocopy the checks while they were in Respondent's office. Once the checks were photocopied, Respondent returned the checks to the Buyers. Respondent advised the Buyers to deliver the $2,000 check to the escrow agent that day and to mail the second check by the due date. Mr. Greenspan's office was in the same building as the mortgage company that the Buyers were using for the purchase of the property. His office was also in close proximity to Respondent's office. The Buyers failed to deliver the $2,000 deposit check to Mr. Greenspan on May 1, 1997. Respondent did not know that the check had not been given to Mr. Greenspan by the Buyers. Mr. Greenspan received a copy of the Contract. He did not contact any of the parties to the Contract regarding the escrow monies. As an escrow agent, Mr. Greenspan's office handles a large volume of closings and it is possible, according to him, that his staff assumed that the escrow monies had been received. No one in Mr. Greenspan's office verified that the monies had been received. Prior to the due date for the payment of the second deposit of $13,000, Respondent contacted the Sellers' listing agent, Mr. Salomon, and informed him that the Buyers were having problems paying the second deposit. Shortly after the due date for the payment of the second deposit, Mr. Salomon contacted Respondent, who informed Mr. Salomon that the Buyers had the money. Respondent also faxed Mr. Salomon a copy of the two checks for the two deposits, which were written on May 1, 1997. Mr. Salomon faxed a copy of those checks to the Sellers. Respondent did not inform Mr. Salomon that the Buyers had not given the deposit checks to him. Unbeknownst to Respondent, the Buyers had also failed to mail the second deposit of $13,000 to Mr. Greenspan. Mr. Salomon, having received the fax copy of the checks, assumed that the escrow agent had the Buyers' deposits. The Sellers, having received the fax copy of the checks, assumed also that the escrow agent had the Buyers' deposits. Mr. Greenspan became aware that his office did not have the Buyers' deposits in escrow when the mortgage company requested that he provide an escrow letter. He contacted the Sellers' attorney, who faxed a copy of the Buyers' checks. At that time, Mr. Greenspan became concerned regarding the Contract because the Contract made it appear that he, as the escrow agent, had deposits that he did not have. Mr. Greenspan contacted Respondent regarding the absence of the escrow deposits. Respondent was apologetic and responded to Mr. Greenspan that he (Respondent) was sorry that the Buyers had not given him (Mr. Greenspan) the deposits as they had indicated that they would do. After being contacted by Mr. Greenspan, Respondent attempted to contact the Buyers. He was unsuccessful. The Sellers did not become aware that none of the deposits were in escrow until the day before the scheduled closing on the property. In the manner in which Respondent handled the Buyers' deposits, he failed to follow office policy and practice of The Prudential Florida Realty. According to the office policy and practice, the sales associate handling the transaction has the duty to ensure that the buyer's deposit(s) are deposited with the designated person or entity at the designated time or date. Respondent also failed to advise the Sellers' agent, Mr. Salomon, or the escrow agent, Mr. Greenspan, the Sellers' attorney, or the Sellers that the Buyers had not given him any deposits.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Louis M. Loguercio. DONE AND ENTERED this 29th day of April, 1999, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 29th day of April, 1999.
Findings Of Fact Pursuant to the Prehearing Stipulation, the following facts are established: This case is based on allegations by John Carosso that James J. Baruch, a licensed real estate broker, wrongfully allowed the dispersal of a deposit Mr. Carosso had made to Centennial Development Corporation on a villa to be constructed. James J. Baruch was associated with Wyn Pope Associates, Inc., as a realtor and salesman over a period of several years and on several projects which Mr. Pope developed. On the Gasa Tiempo project, the developer was Centennial Development Corporation and sales were handled by Wyn Pope Associates, Inc. This corporate realtor was formed using James J. Baruch's realtor's license. During their association, Wyn Pope and James Baruch had always agreed that no deposits would be accepted which could not be used for construction after the mortgage commitment. In the past Mr. Baruch had rejected contracts which did not allow such use of the deposit. The Casa Tiempo contracts all contained such a provision and deposit monies were invariably used for construction with the knowledge of the purchasers. Only the contract with John Carosso was changed to provide for an escrow and to prohibit use of the deposit for construction. Mr. Baruch did not prepare or negotiate this contract and his only connection with the Carosso sale was to witness Mr. Carosso's signature. The contract was negotiated and altered by Wyn Pope without Mr. Baruch's knowledge or consent. Neither Mr. Baruch nor Wyn Pope Associates was a party to the contract and the contract said that the deposit would be held in escrow, but did not specify an escrow agent. As a party to the contract, Centennial acknowledged receipt of the deposit and thereby agreed to hold it in escrow. Since Mr. Baruch was not an officer or in any way a part of Centennial Development Corporation, he had no authority to approve or modify the contracts and no reason to believe that he needed to review each contract himself. Mr. Baruch was therefore not authorized to control the deposit which according to the terms of the contract was made to Centennial Development Corporation. Although the contract was signed July 6, 1979, no deposit was received until July 17, 1979. The changes regarding escrow, although typed in, were each initialed, indicating that the contract was changed after execution and witnessing. Given the ten-day delay and initialing, it is likely that the changes regarding the deposit were made in the contract after Mr. Baruch had witnessed Mr. Carosso's signature and as a condition of the deposit being actually paid. In that case, Mr. Baruch would have no way of knowing that the standard contract had been modified unless he checked each contract submitted by other salesmen. Contrary to paragraph 9 of Petitioner's Complaint, Mr. Baruch never had actual knowledge of the terms of the Carosso contract until the project was taken over by Casa Tiempo Builders, Inc., in May, 1980. Mr. Baruch received no commission on the Carosso sale and never received any part of the deposit. Mr. Baruch completely severed his connection with Wyn Pope Associates, Inc., and Casa Tiempo in March, 1980, and did not profit in any way from the additional deposits demanded and received by Joseph Falso in May, 1980. On or about August 7, 1980, John Carosso entered into an agreement for the completion of his villa in which he released Centennial Development from all claims connected with his deposit. John Carosso was injured by the use of his deposit only in that he lost the option of withdrawing his deposit and rescinding the contract. He could not have finished his home at the original contract price even if the deposit remained in escrow. All the homes in the project had appreciated greatly in value between the contract of July 6, 1979 and the May, 1980 meeting, thus it was to each owner's advantage to pay the 7,500 and complete construction. Because of this appreciation, Mr. Carosso could have paid the $7,500 and immediately sold the house in May, 1980 for enough to return his entire initial deposit plus a profit. One Mr. Hmeilewski, a contract vendee, did so with the help of the new management of Centennial. Selling his contract would thus have enabled Mr. Carosso to be in a better position than rescission and return of the deposit. He preferred to have the house at the increased price. Respondent's position is that he was not responsible for the deposit and should not be sanctioned for the events stipulated to, especially since no actual damage was incurred by Mr. Carosso and all claims against the Developer and escrow holder Centennial Development Corporation were released by Mr. Carosso.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Administrative Complaint filed against James J. Baruch be dismissed. DONE and ORDERED this 24th day of August, 1982, in Tallahassee, Florida. SHARYN L. SMITH, 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 24th day of August, 1982. COPIES FURNISHED: Frederick H. Wilsen, Esquire Department of Professional Regulation State Office Building 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Staff Attorney Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Nicholas Rockwell, Esquire McCUNE HIAASEN CRUM FERRIS & GARDNER, P.A. 25 South Andrews Avenue Post Office Box 14636 Fort Lauderdale, Florida 33302 Samuel R. Shorstein, Secretary Department of Professional Regulation Old Courthouse Square Bldg. 130 North Monroe Street Tallahassee, Florida 32301 Carlos B. Stafford Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802
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 holding Respondent, Stephen E. Schiller, t/a Allstate Realty, guilty of violating Section 475.25(1)(b) and (k), Florida Statutes (1985), under Counts I and II of the Administrative Complaint in this case, and suspending his real estate broker's license no. 0374362 for one year. DONE and ORDERED this 27th day of August, 1986 in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 27th day of August, 1986.
