The Issue The issue for determination is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by the State of Florida as a real estate broker, having been issued license number 0521991. Respondent's last license issued was as a broker c/o Stellings Realty, Inc., 2368 Saratoga Bay Drive, West Palm Beach, Florida. Beginning on or about March 1, 1998, until August 31, 1998, Respondent had an Exclusive Right of Sale Listing Agreement (Agreement) with Judy Cominse (Seller) for real property, owned by the Seller, located at 4397-B Woodstock Drive, West Palm Beach, Florida. Respondent represented the Seller as a transaction broker and owed her certain duties pursuant thereto. A Brokerage Relationship Disclosure statement was provided to the Seller by Respondent. Another broker, Robert Berman, was the referring agent and was personally known by the Seller. Respondent was of the opinion that Berman was to receive a referral fee of 25 per cent in the event of a sale. The listing was problematic for Respondent. Respondent encountered problems due to restrictions placed on the showing of the property by the Seller and her tenants, who were the Seller's son and daughter-in-law. Respondent contemplated not continuing with the listing. He even mentioned discontinuing the listing with the Seller, but he did not discontinue it. A contract for sale of the Seller's property was entered into by the Seller and Evelyn Swinton (Buyer Swinton). Buyer Swinton signed the contract on June 1, 1998, and the Seller signed it on June 3, 1998. The contract provided, among other things, for an escrow deposit of $1,500 to be held by Sun Title, located in Lake Worth, Florida. The $1,500 was paid and held in escrow by Sun Title. The transaction for the sale of Seller's property failed to close. By a Release and Cancellation of Contract for Sale and Purchase form (Release and Cancellation) dated July 28, 1998,1 both the Seller and Buyer Swinton agreed, among other things, that the $1,500 escrow deposit would be disbursed to the Seller. On July 30, 1998, Sun Title prepared an escrow check in the amount of $1,500, made payable solely to the Seller. The check was forwarded to Respondent sometime after July 30, 1998; the evidence presented was insufficient to show when Sun Title forwarded the check to Respondent.2 On August 6, 1998, Respondent prepared an addendum (Respondent's Addendum) to the Agreement that he had with the Seller. Respondent's Addendum was dated and signed by Respondent on this same date. Respondent's Addendum provided, among other things, the following: This contract [Agreement] will be extended from August 31, 1998 until March 1, 1999; if necessary.3 * * * Stellings Realty, Inc. will receive 7% of the total purchase price. In addition 25% commission of the listing side will be given to Berman Realty as a referral fee. If the Seller should cancel this listing the cancelation fee would be $1000.00. Judy Cominse [Seller] will receive $1500.00 by mail upon acceptance. Paragraph numbered 5 of Respondent's Addendum indicates that, upon the Seller accepting Respondent's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. The Seller did not accept Respondent's Addendum although the Seller was of the opinion that the only way for her to obtain the $1,500 was to agree to an addendum to the contract that she had with Respondent. With the assistance of her sister, who was a licensee, licensed by Petitioner,4 the Seller negotiated a change of terms to Respondent's Addendum. The seller prepared and executed an addendum (Seller's Addendum) on August 6, 1998, and forwarded it to Respondent. The Seller's Addendum provided, among other things, the following: This listing agreement [Agreement] will be extended six months (i.e., from August 31, 1998 until February 28, 1999). * * * Stellings Realty, Inc. will receive 7% of the total selling price (if sold at full listing price), otherwise negotiable; however, no lower than 6%. Additionally, $533.75 to the listing agency (Stellings Realty), which amount will not be subject to the referral fee due and payable to Robert A. Berman Real Estate, the referring broker to the listing agency. If the seller should cancel this listing, the cancellation fee would be $788.75 ($250.00 cancellation fee, plus $533.75). Judy Cominse [Seller] will receive $1,500.00 (100% of the escrow deposit relinquished by the buyer [Buyer Swinton]) by mail upon acceptance. Paragraph 5 of Seller's Addendum indicates that, upon Respondent's accepting the Seller's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. Respondent executed the Seller's Addendum on August 11, 1998, and faxed it to her on this same date. Respondent accepted the Seller's Addendum on August 11, 1998. Prior to August 11, 1998, Berman had contacted Respondent on behalf of the Seller. Berman was requested by the Seller to make an attempt to obtain the escrow deposit of $1,500 for her. Berman contacted Respondent who indicated to Berman that, as soon as the escrow check was received, he would contact Berman. Sometime after July 30, 1998, Berman contacted Sun Title and was informed that the escrow check had been prepared and forwarded to Respondent. On or about August 11, 1998, Respondent contacted the Seller and informed her that the escrow check had been received by him. On or about August 11, 1998, Respondent also contacted Berman regarding the receipt of the escrow check. At the request of the Seller, Berman went to Respondent's office, obtained the escrow check, and forwarded it to the Seller via express delivery. Based upon the required proof, the evidence fails to demonstrate that Respondent refused to relinquish the $1,500 escrow deposit to the Seller in order to force or pressure the Seller to agree to an addendum to their Agreement. Respondent continued to represent the Seller. The Seller's property was sold on November 3, 1998. Subsequently, Respondent sued the Seller in the County Court of West Palm Beach, Florida for $533.75, based on the Seller's Addendum. The Seller had refused to pay Respondent the $533.75, pursuant to the Seller's Addendum, and Respondent sued the Seller to recoup the monies. On or about January 4, 1999, the court suit was settled. Before the end of 1998, Respondent paid Berman the referral fee.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate enter a final order and therein dismiss the Administrative Complaint filed against Leon Stellings. DONE AND ENTERED this 31st day of July, 2000, 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 31st day of July, 2000.
Findings Of Fact By Prehearing Stipulation entered into by the parties on August 30, 1990, the parties agreed, and it is so found, that: Petitioner, Edward T. Strehlau, is President and control person of Deerfield Securities, Inc. On or about February 3, 1989, Petitioners filed an application, (Form BD), for registration as a broker/dealer, which was signed by Mr. Strehlau. On or about March 15, 1989, Petitioners filed with the Division an amendment to that Form BD. On or about April 19, June 22, and July 20, 1989, Petitioners filed additional amendments to the Form BD initially signed and submitted on behalf of the Petitioners by Mr. Strehlau. All of the Forms BD and amendments filed by Petitioner, Strehlau, with the Division were represented by him as true and complete. On February 3, 1989, Petitioner, Strehlau, also filed the Articles of Incorporation of Deerfield Securities, Inc., with the Florida Secretary of State. These Articles listed Edward T. Strehlau, Patericia O'Dell, William Manger, and Patricia Strehlau as Directors. The Division of Securities requires the filing of the Articles of Incorporation along with the dorm BD. This requirement is outlined in Section 517.12, Florida Statutes. Neither William Manger nor Patricia Strehlau were listed as Directors of Deerfield Securities, Inc., on the Form BD or on any amendments thereto which were filed with the Division. Mr. Manger is the subject of a complaint relating to securities violations committed by Eiffel Securities, Inc., Mr. Manger, a Mr. Riddle, and a Mr. Ashbee, in the State of Tennessee. On or about February 23, 1989, Mr. Strehlau, as President of Deerfield, withdrew the application for registration of Deerfield Securities, Inc., as a broker dealer with the State of Tennessee, and further agreed not to reapply for registration as a broker/dealer in that State, and not to sell Deerfield Investments, Inc.'s investment units in Tennessee. Deerfield Securities, Inc. is a wholly owned subsidiary of Deerfield Investments, Inc. Edward T. Strehlau is a control person and President of Deerfield Investments, Inc. The principal place of business of Deerfield Securities, Inc. is Sarasota, Florida. William Manger, at all times pertinent hereto, was President and a control person of the aforementioned Eiffel Securities, Inc., a Tennessee corporation. Petitioner, Edward T. Strehlau, was a control person of Eiffel Securities, Inc., during the period June 1, 1988 through September 21, 1988. Eiffel Securities, Inc. was a wholly owned subsidiary of Tennessee Investments Marketing Enterprises, (TIME), and Edward T. Strehlau was vice-president of TIME between June, 1988 and September, 1988. On February 3, 1989, Petitioner Strehlau paid $200.00 in filing fees for Deerfield Securities, Inc. with the Florida Division of Securities. On February 10, 1989, The Division of Securities notified Deerfield of several deficiencies in its application for registration as a securities dealer. These deficiencies included a requirement for: the officer or partner names of the parent firm; registration as a foreign corporation or a legal opinion indicating no need therefor;+ a clearing agreement from a dealer in Florida signed by both firms; Articles of Incorporation or partnership agreement; proof of securities effectiveness and compliance with SIPC (Securities Investors Protection Corporation). Thereafter, on February 27, March 16, April 20, June 22, and July 18, 1989, Mr. Strehlau sent letters to the Division of Securities in which he attempted to convince the Division of his compliance with the requirements set forth in the February 10, 1989 deficiencies letter. The Petitioner's efforts, however, were not supported by facts in some particulars. For example, the clearing agreement with OTRA, to be signed by both parties, was signed only by Petitioner Strehlau as President of Deerfield Securities, Inc., and attested by Patericia O'Dell of the firm. No signature from any responsible party of OTRA appears on the document. By letter dated December 2, 1988, Mr. Strehlau submitted this unilaterally executed clearing agreement. By letter dated February 22, 1989, the vice- president for finance of the SIPC attested that Deerfield Securities, Inc. was, as of that date, registered with the Securities and Exchange Commission, (SEC), as a securities broker under Section 15(b), of the 1934 Securities Investor Protection Act, and by operation of that Act, the corporation would be a member of SIPC unless its business consisted exclusively of various activities which are not pertinent to this hearing. It would appear, therefore, that Deerfield Securities, Inc. was, at the time of application at least, a member of SIPC. It is also found, however, that the application for registration submitted by Mr. Strehlau on behalf of himself and Deerfield Securities, Inc. contained what appears to be a material misrepresentation of fact in that it did not list Mr. Manger and Mrs. Strehlau as Directors. Mr. Manger had a disciplinary history in the industry in Tennessee and his omission was material. Article VI of Deerfield Securities' Articles of Incorporation filed with the Florida's Secretary of State's office listed Mr. Manger as one of the original Directors of Deerfield Securities, Inc. as of February 3, 1989. However, when Mr. Strehlau submitted the application for registration for Deerfield, (Form BD), neither that form nor any of the subsequent amendments listed Manger as a Director or affiliated person even though the form required that all Directors be listed. Mr. Strehlau contends that Manger and Mrs. Strehlau were omitted because neither were to take an active part in the management of Deerfield's operations. The Division, however, considered the omission to be a false material statement since the Directors of an applicant are considered to be pertinent to its operation. In this, the Division is correct. The Division also took the position that the pending Tennessee disciplinary action against Mr. Manger was significant. It surmised that Manger, seeing he could not be licensed in Florida on his own, was attempting to achieve this end through Mr. Strehlau, and the Department was concerned there was still a relationship between Manger and Deerfield. There is no evidence, direct or otherwise, to support that suspicion. When an application form is sent to an applicant, upon the applicant's request, an instruction sheet is sent with it which outlines the basic requirements for filing. These instructions are not, however, all inclusive or controlling. The statutes and Rules of the Department, pertinent to criteria for application and registration, constitute the ultimate guidelines over who is approved for registration. When Division analysts review an application, they check it against a requirements check list to insure that all requirements are met. If required information is not included with the application, the Division must notify the applicant of the omitted information within 30 days. If the requested information is received within 60 days, the Division then has an additional 90 days in which to rule on the application. If the omitted information is not timely received, however, the Division can deny the application for incompleteness or approve it if appropriate. On the other hand, when all required information is received timely, if the Division does not act on the application within 90 days, the application is automatically approved and if a discrepancy is thereafter noted, corrective action must be through disciplinary action rather than denial. The Division's denial action here was based on two grounds. The first was the failure to list Mr. Manger as a Director on the original Form BD or any of the amendments thereto. The second was Mr. Manger's prior and pending disciplinary record. Even if the pending action were not considered, the Division would still have denied the Petitioner, Deerfield's, application based on the prior, completed disciplinary actions against Mr. Manger in Tennessee. Petitioner claims that the Division did not request a second time those items listed on the initial deficiency letter and which were not thereafter provided by him. It is the Division's policy that once the initial deficiency letter is sent, calling for additional information, if the applicant submits only a part of those items identified, it will not send out another notification reminding the applicant of the still- missing items. It is not required that such follow-up notification be sent. If, however, the applicant calls and inquires if its application is complete, the Division will advise the applicant which of the previously noted deficiencies have not yet been corrected. Here, no such inquiry by the Petitioner was made. In this case, the Division took the position that Petitioner's application was never complete since there was no clearing agreement signed by the required parties prior to approval. Further, Mr. Strehlau's application as a principal failed to include a proper copy of his personal disciplinary history regarding a dismissed charge of felonious pointing a fire arm in Oklahoma in 1981. Under Florida law, every securities dealership must have a registered principal and Mr. Strehlau was to fill that capacity for Deerfield. Since his application could not be deemed complete because of the failure to provide all the required information, neither could Deerfield's be deemed complete. The State of Florida will not approve the application of a broker/securities dealer without approval of the National Association of Securities Dealers, (NASD). It is normal practice for NASD and Florida approval to be at the same time. There is an attempt at coordination, but Florida cannot approve a dealer for registration without the approval of the SEC and NASD. As of March 8, 1989, the state had been advised that NASD was prepared to approve Deerfield Securities, Inc., though it had some reservations about the firm which were insufficient to support denial. Even had NASD granted approval, however, NASD registration and membership does not guarantee Florida registration. The standards for registration are different. No doubt Mr. Strehlau made many phone calls to the Division in an effort to get approval of these applications. Without question he submitted numerous amendments to the Form BD in an effort to provide that information that the Division asked for in a timely and proper manner. His claims that neither Mr. Manger nor Mrs. Strehlau were listed as Directors on any of the forms because they were not involved in the operation of the business, and that had it been intended for them to work in an operational capacity, they would have been listed are not persuasive, however. Notwithstanding his argument that if the Division had any questions about that, it should have inquired, clearly, that is not the Division's responsibility to do.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that the application of Deerfield Securities, Inc. to be registered as a broker/dealer, and the application of Edward T. Strehlau to be registered as an associated person/principal of Deerfield Securities, Inc., in Florida be denied. RECOMMENDED this 5th day of October, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of October, 1990. COPIES FURNISHED: Edward T. Strehlau, pro se 13122 Woodington Drive Houston, Texas 77038 R. Beth Atchison, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether the Petitioner is entitled to licensure in Florida as a Non-resident Life and Variable Annuity Agent?
Findings Of Fact The Petitioner, Linda C. Ballou, applied for a license as a Non-resident Life and Variable Annuity license by application completed on October 30, 2003. The Department denied her license by letter dated March 18, 2004. There is no explanation of why there was a delay in issuing the March 18, 2004 denial letter. There was no apparent request for additional information to complete the application after October 30, 2004, or information requested to resolve qualification issues. The Department denied the Petitioner's application on the basis that the Petitioner was not trustworthy or competent based upon her having been enjoined from violating the Federal Securities and Exchange Law and being barred from associating with any broker or dealer for three years after which she could reapply for association. The Department introduced and properly authenticated Respondent's Exhibits 3, 5, 6, and 7, together with a copy of the Petitioner's statement, Respondent's Exhibit 4, regarding the action of the Securities and Exchange Commission (SEC). The Petitioner testified regarding the events that were the subject of the SEC action. The Petitioner was counseling persons, particularly seniors, on purchasing life and annuity contracts primarily for long term care. She was an agent for CNA and New York Life, both of which were insurance companies. She was required to possess a "6-63 license" by her employer that authorized her to sell mutual funds and other instruments, which would be classed as securities. She carried errors and omissions (O & E) coverage with New York Life and paid the premium for O & E coverage for one year. While so employed, she was introduced by the president of CNA to his father, who told her about bonds payable in full in nine (9) months. He explained to her that these bonds were not securities, which are instruments payable in year or longer. There were several of these bonds available; however, the only one that she sold was one issued by Sebastian International Enterprises (SIE), a Florida-based television production company. These bonds paid very high rates of interest, and appeared to be a good investment. The Petitioner called the local bank and found that SIE was a viable company engaging in the business of producing films for television. She visited the company and saw them making television shows. The company had contracts to make additional television shows, and the company remained at all times pertaining to this case a viable company. After checking into the company, she invested in the company's bonds; she sold the bonds to members of her family; and members of the public. She never had any problems with the payment of premiums by the company. After selling SIE bonds for approximately a year, she saw a news story about one of the other companies, which had been presented to her by the father of the president of CNA, being investigated for being a "Ponzi" scheme. She checked with her attorney about the sale of SIE bonds, and, thereafter, contacted the Federal Bureau of Investigation (FBI) on his advise. The FBI referred the matter to the SEC, which opened an investigation of SIE. The Petitioner cooperated fully with this investigation. Ultimately, the financial records of SIE were seized, and the SEC determined that the sale of the nine-month bonds was a "Ponzi" scheme. Although no action was ever taken against SIE or the Petitioner's broker, the Petitioner and two others holding SEC licenses were disciplined. Although as a result of the aforementioned, the Petitioner surrendered her California license to sell insurance, she has been reinstated, and was able to seek an SEC securities broker's license after the three years ran. The administrative proceeding SEC brought against the Petitioner alleged that the Petitioner violated the Federal Securities and Exchange Act. The SEC order and complaint is based upon admissions by the Petitioner and recites that the Petitioner consents to the entry of the anticipated injunction without admitting or denying the allegations of the complaint. See Respondent's Exhibit 3. The complaint filed against the Petitioner in the United States District Court, Middle District of Florida is Respondent's Exhibit 5. This complaint states that the funds from the sale of the subject bonds were to fund the operations of SIE. The Petitioner testified that the proceeds were used to fund the daily operation of the company. This complaint also makes various allegations of misconduct and fraud against the Petitioner; however, no evidence was received at hearing in support of any of the SEC allegations, and the consent agreement signed by the Petitioner specifically states that she does not admit or deny the allegations contained in the complaint. By signing the agreement, the Petitioner avoided litigation on the issue and, although she voluntarily agreed to repay all commissions she earned from the sale of these notes (approximately $156,000), the agreement recites that she would not have to repay the money in light of her bankruptcy unless her statement were determined to be false. 77 United States Code 77c provides in pertinent part regarding items that are exempted as securities as follows: (3) Any note, draft, bill of exchange, or banker's acceptance which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited[.] (Emphasis supplied.)
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department issue the Petitioner a Non-resident Life and Variable Annuity Agent license. DONE AND ENTERED this 18th day of October, 2004, in Tallahassee, Leon County, Florida. S STEPHEN F. DEAN 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 18th day of October, 2004. COPIES FURNISHED: Linda C. Ballou 1001 Bridgeway No. 314 Sausalito, California 94965 Michael T. Ruff, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Tom Gallagher, Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issues in this case are whether Respondents violated Subsection 475.25(1)(k), Florida Statutes (1999), by failing to maintain an escrow deposit in a trust account until properly authorized; whether Respondents violated Subsection 475.25(1)(d)1, Florida Statutes, by failing to account for or deliver funds; whether Respondents violated Subsection 475.25(1)(b), Florida Statutes, by committing a breach of trust or culpable negligence in a business transaction; and, if so, whether the proposed penalty is reasonable.
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Simons is licensed in the state as a real estate broker/officer of Respondent, Home Hunters USA, Inc. (Home Hunters), pursuant to license number BK-0159866. Home Hunters is a corporation registered as a Florida real estate broker pursuant to license number CQ-0146369. On March 21, 1996, Respondents entered into a property management contract (amended contract) with Max and Mary Newman (Newmans). The amended contract authorized Respondents to lease and manage real property owned by the Newmans and located at 1555 Whiskey Creek Drive, Ft. Myers, Florida 33919 (the property). The original contract that Respondents proposed to the Newmans was dated March 11, 1996. The original contract contained a clause that would have obligated the Newmans to pay a sales commission to Respondents in the event Respondents sold the property to a tenant or certain other purchasers. The Newmans deleted that language from the original contract, initialed the deletion, dated the deletion "3/21/96," signed the amended contract on March 21, 1996, and returned the amended contract to Respondents. The deleted language in the amended contract signed by the Newmans provided: Owner agrees to pay Agent a sales commission for the sale of said property to the tenant, or any other the tenant relates or refers. Agent will perform any services normally performed to consummate the sale to the tenant in a professional and diligent manner. Owner shall notify Agent at earliest possible time so that Agent may perform services (prequalify, arrange financing, closing, repairs, etc.). It is the owners [sic] responsibility to pay said fee to Agent upon closing of sale. Petitioner's Exhibit 5 (P-5) at 19 (the second unnumbered page of the exhibit). On or about February 1, 1999, Respondents brokered a lease of the property from the Newmans to Ms. Lilly Gilson (Gilson). Mr. Newman signed the lease agreement on February 14, 1999, and Gilson signed it on February 23, 1999. The lease agreement, in relevant part, obligated the Newmans to pay Respondents a "fee" in the event the "tenant should enter into a lease purchase, lease option, or purchase through their tenancy." The lease agreement states that the fee is for Respondents "serving the sale as a broker" but does not specify the amount of the fee, does not express the fee as a percentage of the purchase price, and does not otherwise specify how the fee is to be determined. Neither of the Respondents is a signatory to the lease agreement. At the time Gilson entered into the lease agreement, Gilson paid a deposit of $650 to Respondents as a security deposit in accordance with the lease agreement. Respondents placed this deposit into a trust account. At some point prior to December 1999, the Newmans entered into a purchase and sale contract to sell the property to Mr. Gary Newman (Buyer). The Buyer is unrelated to the Newmans, but is a relative of Gilson. The Newmans closed on the sale to the Buyer on December 28, 1999. The parties to the sale used other brokers in the transaction over Respondents' objections, and neither of the Respondents served the sale as a broker. The closing statement shows that the Buyer was obligated to pay the $635 security deposit to the Newmans. Subsequent to the closing, Respondents transferred the security deposit from their trust account to their operating account. Simons believed he was entitled to a commission on the sale from the Newmans to Buyer. Respondents had actual knowledge that the Newmans claimed entitlement to the security deposit and disputed Respondents' entitlement to the security deposit. Simons was aware as early as December 11, 1999, that the Newmans did not knowingly consent to pay Respondents a commission on the sale transaction. Respondents failed to notify the Florida Real Estate Commission (Commission) of the dispute concerning entitlement to the security deposit. Respondents did not institute the settlement procedures prescribed in Subsection 475.25(1)(d)1, Florida Statutes (1999).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding that Respondents violated Subsections 475.25(1)(b), (d), and (k), Florida Statutes (1999), by committing the acts alleged in the Administrative Complaint; imposing a fine of $1,000 against each licensee; and suspending Respondents' licenses concurrently for 30 days. DONE AND ENTERED this 4th day of December, 2003, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 2003. COPIES FURNISHED: Christopher J. DeCosta, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801-N Orlando, Florida 32801 Larry A. Simons Home Hunters USA, Inc. 1415 Colonial Boulevard, Suite 3 Fort Myers, Florida 33907 Nancy P. Campiglia, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802-N Orlando, Florida 32801-1772
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against H. Ernest Morris, Sr. be DISMISSED with prejudice. DONE and ENTERED this 3rd day of May, 1984, 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 3rd day of May, 1984. COPIES FURNISHED: Tina Hipple, Esquire P. O. Box 1900 Orlando, Florida 32802 Carmine M. Bravo, Esquire 1450 State Road 434 Longwood, Florida 32750 Steven H. Coover, Esquire P. O. Drawer H Sanford, Florida 32771 Fred M. Roche, Secretary 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold R. Huff, Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION Petitioner, vs. CASE NO. 0034049 DOAH NO. 83-3273 H. ERNEST MORRIS, SR. Respondent. /
Findings Of Fact At all times material hereto, Respondent Mark S. Henderson (hereinafter "Henderson") has been a real estate salesman licensed in the State of Florida, having been issued License No. 0441662. At all times material hereto, Respondent Auction World of West Florida, Inc., (hereinafter "Auction World") has been a corporate real estate broker registered in the State of Florida, having been issued License No. 0238372. Respondent Henderson is a real estate salesman/auctioneer employed by Auction World. He moved to Florida in October, 1984, and became a licensed real estate salesman in Florida in February, 1985, some 8 months prior to the transaction forming the basis for the Administrative Complaint. John and Joanne Henneberry signed a listing for the auction/sale of their home with Auction World through Henderson. The Henneberrys are both educated people who had prior experience in buying and selling real estate. The October 1, 1985 listing signed by the Henneberrys provided that it was a 30-day listings provided for a seven percent commission, provided for the Henneberrys to pay advertising costs not to exceed $750, and provided specifically that the $750 would not be considered as an advance fee. The listing further provided for an accounting to be made within 30 days. The Henneberrys gave Auction World a check for $750. The Henneberrys' best friend is Ralph Marciano, a real estate broker. He sold his home through Auction World and referred the Henneberrys to Auction World. The Henneberrys purchased a home through Marciano and throughout the transactions involved here consulted Marciano about how to proceed. Auction World was engaged primarily to sell the Henneberrys' home in Lehigh Acres, and Marciano was involved in the purchase or offers to purchase their new home. Pursuant to the listings advertising for the auction was published by Auction World. The auction was held on October 19, 1985, but no sale resulted from the contract negotiated through the auction. Auction World continued to work on behalf of the Henneberrys pursuant to an oral extension. Johan Ruhe and his wife were advised by Henderson of the availability of the Henneberrys' home in Lehigh Acres. Johan Ruhe is a retired real estate broker who now works for Lee County as its Director of Land Management. In December, 1984, an offer of $66,000 was made by the Ruhes to the Henneberrys through Auction World, but this offer was not accepted. On January 2 or 3, 1985, the Ruhes made an offer on the Henneberrys' home in the amount of $68,000. The offer provided for no down payment; included the range, refrigerator, dishwasher, washer, dryer, curtains and draperies to be included in the sale price; and called for financing over 30 years at an 11 percent fixed rate of interest. It further required that financing be obtained for 80 to 95 percent of the purchase price. This offer was accepted by the Henneberrys, and all parties considered this to be a binding legal contract. The original listing had called for a 7 percent commission, but when the $68,000 contract was signed, the Henneberrys negotiated Auction World from a 7 percent commission down to a $3,000 commission. The Ruhes filed a loan application with B. F. Saul Mortgage Company (hereinafter "B. F. Saul") based upon the $68,000 contract. B. F. Saul has an office in Fort Myers, Florida, which was opened on May 2, 1983, by Robert W. Prange (hereinafter "Prange") who at all times relevant to this action was a vice-president of B. F. Saul and branch manager of the local office. On January 11, 1986, the Henneberrys made an offer to purchase a home from the Jamilles, which was contingent on the Henneberrys closing with the Ruhes. Prior to signing the contract with the Ruhes, the Henneberrys discussed the contract with their best friend, real estate broker Marciano who made changes to the contract and discussed with the Henneberrys the fact that there was no deposit provided in reference to that contract. After the Henneberrys signed the contract to purchase a home from the Jamilles, the Jamilles' broker indicated to the Henneberrys that the Jamilles would like the Henneberrys' contract with the Ruhes to have a provision for a deposit. During this period of time, the Henneberrys were in direct contact with Prange at B. F. Saul, and Prange indicated to them that there was no problem with the Ruhe contract and loan application. After the Jamilles' broker contacted the Henneberrys and asked for a contract showing an escrow deposit on the Henneberry home, the Henneberrys contacted Henderson at Auction World and asked him to draw a new contract to show that a down payment had been made. Henderson prepared a new contract, and the Ruhes signed it. The new contract showed a deposit of $3,600, a purchase price increase of $3,600, and a commission increase of $3,600. In order to show the deposit requested by the Henneberrys, Auction World "gifted" by letter the $3,600 to the Ruhes. The contract was then presented to the Henneberrys. In fact, the Ruhes were not paying $3,600 more to purchase the home for which they already had a contract. Since the new agreement increased the commission by $3,600, Auction World by letter was giving back that sum to the Ruhes so that everything actually stayed the same but an escrow was shown as requested by the Henneberrys. The Henneberrys signed the new contract. At the time that they signed, they knew that the Ruhes were not paying the $3,600 additional purchase price. About the same time that the Henneberrys were requesting that the contract be redrawn to reflect a down payment from the Ruhes, Prange at B. F. Saul became concerned as to whether the Ruhes had sufficient cash available to them to consummate the transaction. When the second contract was taken by Henderson to Prange, Prange suggested that a change be made in it from a fixed interest rate to a variable interest rate so that the Ruhes could qualify for the loan. Prange then "whited out" the listing of personal property that appeared in the contract, suggesting that the deletion of the personal property would reflect an increased value in the price of the real estate. Although Prange was an officer of B. F. Saul, he was on a commission basis. He was not only the loan officer on the Henneberrys/Ruhes transaction, he was also the loan officer on the Henneberrys/Jamilles transaction. Accordingly, he knew that a successful consummation of the Ruhe transaction would ensure him of receiving two commissions but that a lack of success on the Ruhe transaction would automatically defeat the Jamille transaction. Prange knew that there was no escrow of $3,600 as reflected by the second contract Henderson presented to him. Yet, he requested Henderson to execute a "Verification of Earnest Money" form, which stated that an earnest money deposit had been received in the amount of $3,600 to be held toward the down payment and/or closing costs on the Henneberrys home. The form did not represent that the money was held in escrow, nor did it differentiate between whether that money was the down payment toward the purchase or whether that money was to be used toward closing costs. Henderson signed the verification that the $3,600 deposit was being held by Auction World because he believed the gift to the Ruhes was the same as having the deposit since it was Auction World's $3,600. Additionally, the buyer, the seller, and the loan officer were aware of the contents and reasons for the series of contracts, and the gift was evident from the series of contracts involved. Henderson prepared another contract. He also prepared an addendum to that contract containing an agreement on the purchase of the personal property since he believed the personal property had to be mentioned somewhere in order to protect both the buyer and the seller. The addendum was signed on or about February 13, 1985. The newest contract also provided for the seller to pay the closing costs. When the addendum was presented to the Henneberrys they insisted that an additional provision be added to the addendum that would guarantee that the buyer would pay the Henneberrys $4,000 toward the closing costs prior to the closing. Therefore, at the Henneberrys' request, language was added to the addendum to provide that $4,000 would be paid to the Henneberrys 72 hours prior to the closing by either Auction World or by the Ruhes. Despite the efforts of Henderson and Prange to successfully structure the Henneberry/Ruhe transaction, the Ruhes were not able to obtain approval on their loan application, and the Henneberry/Ruhe sale was not consummated. The listing agreement for the auction of the Henneberry home required that the Henneberrys pay $750 to Auction World to pay for the costs of advertising the auction. The listing contract specifically provided that the $750 did not represent an advance fee but simply represented costs of advertising. Since the statutes regulating the real estate profession do not define what constitutes an advance fee, Henderson consulted an attorney regarding the desire to obtain advertising costs in advance. The listing form used and the method of handling the Henneberrys' $750 was in compliance with the recommendation to Auction World and Henderson by that attorney. The legal advice given to them was that none of the $750 should be used on any overhead or internal expenses but rather the $750 must all be spent on independent outside advertising. Since the listing agreement specified that the $750 was not an advance fee, and since Henderson and Auction World followed the procedure recommended to them by an attorney, all parties believed that the funds were not an advance fee. The listing called for an accounting within 30 days, and an oral accounting was provided at that time. The Henneberrys did not request a further accounting until February 27 or 28, 1985. A written accounting was provided by March 11, 1985. No evidence was offered to show that any of the $750 was kept other than in a trust or escrow account at Auction World, and no evidence was offered to indicate that any of it was misused. In fact, the advertising expenses on the Henneberry home exceeded $750, and Auction World bore the extra expense.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered finding Respondents Henderson and Auction World not guilty of the allegations contained within Counts I, III, and V, and dismissing the Administrative Complaint filed against them. DONE and RECOMMENDED this 3rd day of November, 1987, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0602 Respondents Henderson and Auction World's proposed findings of fact numbered 1, 30, 35, 36, and 38 have been rejected as not constituting findings or fact but rather as constituting conclusions of law or argument of counsel. Respondents Henderson and Auction World's proposed findings of fact numbered 2, 6, and 7 have been rejected as being immaterial to the issues under consideration herein. Respondents Henderson and Auction World's proposed findings of fact numbered 3-5, 8-29, 31-34, 37, and 39-42 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Arthur R. Shell, Jr., Esquire Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 E. G. Couse Esquire Post Office Drawer 1647 Fort Myers, Florida 33902 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue Whether Respondent, Redland Brokers, a dealer in agricultural products, is indebted to Petitioner, a producer of agricultural products, for 529 hampers of peas delivered by Petitioner to Redland Brokers on May 2, 3, and 7, 1996, and subsequently resold by Redland Brokers on behalf of Petitioner.
Findings Of Fact Petitioner is a producer of agricultural products. Respondent, Redland Brokers Exchange, Inc. (Redland), is a dealer in agricultural products. At all times pertinent to this proceeding, there was a marketing agreement in effect between Petitioner and Redland. This agreement provided, in pertinent part, as follows: The grower (Petitioner) gives Redland Brokers Exchange, Inc. the right to sell or consign to the general trade. No guarantees as to sales price are made and only amounts actually received by Redland Brokers Exchange less selling charges, loading charges, cooling charges and any other charges will be paid to the grower. Final settlement will be made within a reasonable length of time and may be held until payment is received from the purchaser. On May 2, 1996, Martin Ruiz, the son of the Petitioner, delivered to Redland 233 hampers of peas for sale on consignment. On May 3, 1996, Mr. Ruiz delivered to Redland 38 hampers of peas for sale on consignment. On May 3, 1996, Mr. Ruiz delivered to Redland 124 hampers of peas. On May 7, 1996, Mr. Ruiz delivered to Redland 134 hampers of peas. These peas were produced by Petitioner and her family. Petitioner asserts that the sale price for the peas delivered on May 2 and 3, 1996, should have been $20.00 per hamper. Petitioner asserts that the sale price for the peas delivered May 7, 1996, should have been $14.00 per hamper. Petitioner does not challenge the amounts deducted from the sales price by Redland for its commission, advances it made to the grower, and for crates. The greater weight of the evidence established that Mr. Ruiz was misinformed as to the fair market value for the peas that were delivered to Redland in May 1996 and that he believed the price to be greater than the actual fair market value. Redland did not misrepresent to Petitioner the fair market value of these peas. The greater weight of the evidence established that Redland sold the peas that Petitioner delivered to it in the regular course of business and that it paid Petitioner in full for that product consistent with the marketing agreement that was in effect. The lower prices were the result of falling market prices and the poor quality of some of the peas. Petitioner failed to establish that Redland was indebted to her as a result of these transactions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner’s complaint be dismissed. DONE AND ENTERED this 7th day of April, 1997, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 1997. COPIES FURNISHED: Oralia Vera, pro se 14500 Southwest 280th Street, Lot 4 Homestead, Florida 33032 Frank T. Basso, Jr., President Redland Brokers Exchange, Inc. Post Office Box 343544 Florida City, Florida 33034 Florida Farm Bureau General Insurance Company (Legal Dept.) Post Office Box 147030 Gainesville, Florida 32614 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 Richard Tritschler, General Counsel Department of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Honorable Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The central issue in this case is whether Petitioner is entitled to be registered as an associated person.
Findings Of Fact Petitioner filed an uniform application for securities registration with the Department. This application sought registration as a general securities representative (5-7) and named Sheffield Securities, Inc. as the firm for whom she intended to work. The application sought information regarding Petitioner's past work experience and specifically inquired as to whether the U.S. Securities and Exchange Commission (SEC) had ever found her to have been involved in a violation of investment-related regulations or statutes. The application also asked Petitioner to disclose whether the SEC had entered an order denying, suspending or revoking her registration or disciplined here by restricting her activities. To both of these questions Petitioner answered "yes." Petitioner's association with the securities industry began in 1972 when she was employed as a secretary for a securities firm. Her work prior to that had been as a bookkeeper. Petitioner obtained her registration and purchased a securities business, Adams & Whitney Securities Corp., in late 1973 or early 1974. Adams & Whitney was registered with the SEC and operated as a broker/dealer buying and selling interests for itself and others. Petitioner was the president and sole principal for Adams & Whitney. On February 9, 1976, the SEC issued a released which claimed Adams & Whitney and Petitioner had wilfully violated and wilfully aided and abetted violations of the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities EXCHANGE ACT of 1934, and Rule lOb-5 in connection with an offer to purchase, and sale of ITS securities and manipulation of the price of the security. The release also alleged Petitioner had violated Section 15(c)(2) of the securities EXCHANGE ACT of 1934 and Rule 15c 2-7 by submitting quotations for ITS securities to a interdealer quotation system without notification to the system of arrangements with other brokers and guarantees of profits. Without admitting or denying the allegations against her, Petitioner submitted an offer of settlement regarding the ITS charges which the SEC determined to accept. As a result, the registration as a broker-dealer of Adams & Whitney was suspended for a period of four months. Also, Petitioner was suspended from association with any broker-dealer for a period of four months. On June 27, 2977, the SEC issued a release which charged that Petitioner had wilfully violated and wilfully aided and abetted violations of the registration provisions of the Securities Act of 1933, and had willfully violated an wilfully aided and abetted violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities EXCHANGE Act of 1934 in connection with the offer and sale of the common stock of Tucker Drilling Company, Inc. Without admitting or denying the allegations against her, Petitioner submitted an offer of settlement regarding the Tucker Drilling charges which the SEC decided to accept. As a result, the SEC found that Petitioner wilfully violated and wilfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act of 1933. Further, it was found Petitioner willfully violated and willfully aided and abetted violations of Section 10(b) of the EXCHANGE act and Rule 10b-6. Based on its findings the SEC suspended Petitioner from association with any brokers, dealer or investment company for a period of twelve months and barred her from association with any broker, dealer or investment company in a supervisory or proprietary capacity. Prior to the entry of the administrative penalties imposed against Petitioner in connection with the Tucker Drilling charges, the SEC had obtained a civil injunction against Petitioner which permanently enjoined her from violating the federal securities laws in connection with the offer and sale of Tucker securities or any other securities. Petitioner maintained at hearing that the submitted of settlement were offered as an expedient means of resolving the charges since she did not have the financial resources needed to oppose the allegations. In connection with the ITS charges, Petitioner stated she did not improperly scheme to manipulate the stock prices, that she neither bought nor sold shares of ITS, and that she was charged with other broker-dealers who had "made a market" for ITS simply because of her association with them. Further, Petitioner denied she had ever received compensation for deals made with the ITS sales In connection with the Tucker Drilling charges, Petitioner admitted she actively participated in the purchase and sale of the Tucker stock but that she had not known of the improprieties of others involved in the trading. Petitioner denied she had knowingly violated the laws and alleged that by the time she determined something was improper, the investigations had begun. Petitioner found the Tucker incident a "stupid mistake. In 1976, Adams & Whitney went out of business. Petitioner subsequently devoted her energy to her own and family health problems and became a housewife. In 1985, Petitioner's family moved to Florida and she worked as a secretary for a brokerage firm called Brown & Hawk, Inc. From September, 1986 until the time of her application, Petitioner worked as a secretary for Sheffield Securities, Inc. During her employment with Sheffield, Petitioner studied for an successfully passed the examination for S-7 registration. According to Dennis Dixon, who was a financial principal and general securities associated person at Sheffield Securities, Petitioner is a very trustworthy person who is also very capable. According to Don Saxon, the determination that Petitioner had violated the anti-fraud provisions was a great concern to the Department since those violations are the most serious types perpetrated by an individual in the industry.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: Department of Banking and Finance, Office of the Comptroller, Division of Securities and Investor Protection enter a Final Order approving Petitioner's application for registration with restrictions as may be deemed appropriate by the Department. DONE and RECOMMENDED this 25th day of July, 1988, 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 25th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-0531 Rulings on Petitioner's proposed Findings of Fact: Paragraph 1 is accepted. Paragraph 2 is accepted. Paragraph 3 is rejected as argument. Paragraph 4 is rejected as argument or unsupported by the evidence. To the extent relevant see findings made in paragraphs 11 & 12. Paragraph 5 is rejected as argument. Paragraph 6 is accepted to the extent addressed in findings made in paragraphs 10, 11, 12 otherwise rejected as argument unsupported by the record, or irrelevant. The first sentence in paragraph 7 is accepted. The balance of paragraph 7 is rejected as argument. Paragraph 8 is accepted. Paragraph 9 is rejected as argument. The first 4 sentences of paragraph 10 are accepted. The balance of paragraph 10 is rejected as argument. Paragraph 11 is rejected as argument. COPIES FURNISHED: Charles E. Scarlett Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32399 Michael J. Cohen, Esquire 517 S. W. First Avenue Fort Lauderdale, Florida 33301 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350
The Issue Whether Respondent, a real estate broker, committed the offenses alleged in the Administrative Complaint dated February 16, 2010, and, if so, the penalties that should be imposed.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165 and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. At all times relevant to this proceeding, Respondent was licensed in the State of Florida as a real estate broker, having been issued license BK-575099. Respondent is registered as a sole proprietor broker, trading as Atlantic Auction Realty. On February 21, 2008, Respondent, acting through his company, entered into a contract (auction contract) with David Mover to auction a townhouse owned by Mr. Mover located at 8626 S.W. 94th Street, Miami, Florida (the subject property). Mr. Mover had been trying to sell the subject property for approximately two years. In March 2007, Mr. Mover became unable to make the mortgage payments on the subject property. On February 21, 2008, the Circuit Court in and for Dade County, Florida, entered a Final Judgment of Mortgage Foreclosure (Judgment of Foreclosure) against the subject property in favor of Washington Mutual Bank, the holder of the first mortgage. The amount of the judgment was $245,727.25. The Judgment of Foreclosure ordered that the property be sold at public sale on April 24, 2008. At the time of the auction, there was a second mortgage on the subject property owned by a trust. The approximate amount of the second mortgage was $120,000.00. The trust was a defendant in the foreclosure proceedings. Prior to the auction conducted by Respondent, the trustee of the trust indicated a possible willingness on the part of the trust to accept less than the balance owed on the second mortgage if the property were sold by private auction, as opposed to the public auction ordered by the Judgment of Foreclosure. However, the subject auction occurred prior to the trustee’s making a commitment to take less than the balance owed on the second mortgage. The price listed on the auction contract was $350,000.00. The minimum amount Mr. Mover wanted for the townhouse was $370,000.00, which would have been sufficient to satisfy the Judgment of Foreclosure and the second mortgage. Mr. Mover never agreed to accept less than $370,000.00 for the subject property.2 Mr. Mover understood that the $350,000.00 figure was a starting point for the auction.3 This was not an absolute auction. Mr. Mover had the right to refuse a bid less than $350,000.00. The auction contract contained the following provision in paragraph 3: 3. 10% BUYER’S PREMIUM will be added to the Buyer’s Bid and be the Auctioneer’s total commission. The auction contract provided that the auction would be on March 20, 2008. Respondent prepared a flyer that announced the terms of the auction. Prospective bidders were notified by the flyer that a 10% deposit would be required the day of the sale and that there would be a buyer’s premium of 10% of the bid. Prospective bidders were required to have a cashier’s check in the amount of $10,000.00. The “Auction Terms and Conditions” included the following provisions: Bidder Registration. The auction is open to the public and your attendance is welcomed. To register, you must display a cashier’s check in the amount as set forth in each property description. Upon being declared the top bidder, the cashier’s check will be applied as a partial deposit, and the deposit must be increased to equal (10%) [sic] of each contract price. Please be advised there are no exceptions. . . . Contract and Deposit. Bids may not be retracted once accepted by the auctioneer. Upon being declared top bidder, the cashier’s check will be applied as a partial deposit. . . . The auction was conducted in the driveway of the subject property. Mr. Mover waited in the upper area of the subject property during the auction. Mr. Gordon opened the bidding at the base bid (the bid amount prior to tacking on the buyer’s premium) of $285,000.00, but agreed to up the base bid to $300,000.00 when Respondent agreed to reduce the buyer’s premium to $10,000.00 from 10% of the base bid amount ($28,500.00 for a base bid of $285,000.00 or $30,000.00 for a base bid of $300,000.00). Respondent went upstairs and wrote down the amount of the bid and told Mr. Mover that he would reduce the buyer’s premium to $10,000.00 if Mr. Mover would accept that price. Mr. Mover refused to accept that bid. Mr. Mover believed that the auction had failed to sell the property. After talking with Mr. Mover, Respondent concluded the auction by declaring Mr. Gordon, bidding on behalf of himself and his wife, the winning bidder at the auction. Mr. Gordon’s base bid was in the amount of $300,000.00 plus a buyer’s premium in the amount of $10,000.00, bringing the total bid to $310,000.00. After being declared the winning bidder, Mr. Gordon gave to the Respondent the $10,000.00 cashier’s check he had brought to the auction. Mr. Gordon signed a document styled “Contract for Sale and Purchase at Auction” (Purchase Contract), which reflected a total selling price of $310,000.00 (this figure included the buyer’s premium) and a requirement that the closing date be on or before April 19, 2008. The Purchase Contract contained the following provision relating to the Buyer’s Premium: 8. BUYER’S PREMIUM – WHEN EARNED: it is understood and agreed by the Seller and the Buyer that the Buyer’s Premium is paid to the Auctioneer at the time of the Auction Sale and is the sole property of the Auctioneer, and he is entitled to this money as his fee at the time of said payment. Respondent told Mr. Gordon that he would cash the check Mr. Gordon gave to him on March 20, 2008, after Mr. and Mrs. Gordon had an executed contract signed by both parties. Respondent cashed Mr. Gordon’s check on March 21, 2008. Respondent never presented the Purchase Contract to Mr. Mover, and the transaction never closed. The Gordons were unable to secure financing because they had no contract. Mr. Gordon has made repeated demands for the return of the proceeds from the check he gave to Respondent. Respondent has refused those demands.4 Respondent was aware of the foreclosure proceeding before he conducted the auction. Respondent did not disclose the foreclosure proceeding to Mr. Gordon prior to the auction. After the auction, Mr. Mover filed for bankruptcy. Mr. Gordon filed no claim in that proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Division of Real Estate find Respondent guilty of the violations alleged in Counts I and II of the Administrative Complaint. For the violation found in Count I, it is recommended that the final order impose against Respondent an administrative fine in the amount of $1,000.00 and that it revoke his broker’s license. For the violation found in Count II, it is recommended that the final order impose an administrative fine in the amount of $250.00 and that it revoke his broker’s license. DONE AND ENTERED this 14th day of July, 2010, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 2010
Findings Of Fact Joseph Rodriguez, Respondent's President, is a licensed dealer in agricultural products under the provisions of Sections 604.15 to 604.30, Florida Statutes, and acts as a negotiating broker between the producer and the buyer. Respondent is bonded through Aetna Casualty & Surety Company, co-Respondent in this case, as required by Section 604.19, Florida Statutes. Respondent acted as broker on thirty sales of Petitioner's cabbage between May 21 and June 7, 1984. On each occasion, Respondent provided Petitioner with a written confirmation of sale which specified the buyer, the place of delivery, the amount of cabbage sold and the terms of the sale, the name of the company supplying the truck to pick up the cabbage and who was supplying the truck. On several occasions, Respondent supplied the truck. However, on all written confirmations provided by Respondent, the following appears: BROKER ARRANGES TRUCK FOR GROWER FOR CONVENIENCE PURPOSES ONLY. On June 8, 1984, Respondent contacted Petitioner's salesman, Donald Waters and ordered 150 bags of cabbage to be sold to Harvey Kaiser, Inc. Respondent was acting as a broker in this transaction between the buyer and seller. Respondent contacted Patterson Truck Brokers and ordered a truck to pick up the cabbage at Petitioner's farm on June 9 and make delivery under the terms of the sale. Petitioner could only provide 121 bags of cabbage. Respondent agreed to this lesser amount and was invoiced accordingly by Petitioner on June 9 in the amount of $272.25. The truck from Patterson Truck Brokers never arrived to pick up the cabbage. Petitioner's father, Donald A. Dunn, Jr., testified that he contacted Joseph Rodriguez on two occasions by telephone to find out where the truck was, and was told that Patterson would be sending it. Rodriguez testified that Patterson Truck Brothers had agreed to provide a truck but when they were unable, he then contacted other trucking companies, as well as other buyers, in an attempt to get a truck on June 9 or 10, or to arrange another sale of Petitioner's cabbage. However, he was not successful and the cabbage went bad. Although there was no completed sale of this cabbage and therefore he earned no brokerage fee on the transaction, Respondent paid Petitioner one-third of the invoice amount for this cabbage, $86.21, on July 23, 1984, as an act of "good faith" and in recognition of the good business relationship they had. He also informed Petitioner that Patterson Truck Brothers and Donald Waters had each also agreed to pay one-third and Petitioner should contact them for payment. Petitioner contends that it should be Respondent's responsibility to pay the entire amount still owing, $172.43. Acting as a broker, Respondent earns no commission for making arrangements to supply a truck for the convenience of the seller. He invoices the buyer, collects the total amount due from the buyer, remits the freight charge to the shipping company, and pays the seller minus his brokerage fee.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture issue a Final Order dismissing the complaint. DONE and ORDERED this 30th day of May, 1985, in Tallahassee, Florida. DONALD D. CONN 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 30th day of May, 1985. COPIES FURNISHED: Joseph Rodriguez President Golden Touch Corporation 950 Colorado Avenue Stuart, FL 33497 The Aetna Casualty & Surety Company 151 Farmington Avenue Hartford, CT 06115 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee FL 32301 Donald A. Dunn, III Route 2, Box 68 Sanford, FL 32771 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, FL 32301
