The Issue The issue in this case is whether the allegations of the Administrative Complaints are correct and, if so, what penalties should be imposed.
Findings Of Fact At all times material to this case, Respondent Tailormade Management, Inc. ("Tailormade"), was a corporation registered as a licensed real estate broker in the State of Florida, license #0259180, located at 12811 Kenwood Lane, #218, Fort Myers, FL 33907. The president of Tailormade was R. C. Hendrickson ("Hendrickson"), an unlicensed person. At all times material to this case, Respondent Comprehensive Management, Inc. ("Comprehensive"), was a corporation registered as a licensed real estate broker in the State of Florida, license #0268646, located at 12811 Kenwood Lane, #218, Fort Myers, FL 33907. Until approximately January 30, 1991, the president of Comprehensive was Hendrickson. On or about January 30, 1991, Hendrickson resigned and relinquished her ownership and control to her son, Jay Coffing, an unlicensed person. The rental escrow account for each company was maintained by Hendrickson and the company bookkeeper. On direction of Hendrickson, the bookkeeper did not disclose information regarding rental escrow accounts to the licensed broker-salespersons. All accounts were reconciled by the bookkeeper who would provide the reconciliation data to the broker. The licensed broker- salespersons did not actually reconcile any accounts, but relied on the bookkeeper's data. At all times material to this case, Linda Futch ("Futch") was a licensed real estate broker in the State of Florida, license #0334770. The most recent license issued to Futch was as a broker-salesperson for Rawlings Realty, Inc., 1642 Colonial Boulevard, Fort Myers, FL 33907-1150. From approximately February 20, 1989 through approximately November 16, 1989, Futch was licensed and operating as qualifying broker and officer for Tailormade. On October 10, 1989, Hendrickson issued check #RE-1895 in the amount of $10,000 from the Tailormade rental escrow account to the Tailormade operating account. A check notation indicated that the funds were "advance management fees". Hendrickson admitted to the company bookkeeper that the funds were to be used to pay the outstanding balance owed to the previous co-owner of Tailormade, from whom Hendrickson had purchased the business. At no time during the period Futch acted as qualifying broker and officer for Tailormade did Futch prepare or sign written monthly escrow account statement reconciliations. Futch did not balance escrow liabilities with the escrow assets. Futch failed to make appropriate entries in monthly reconciliation statements which would note whether a shortage existed and whether corrective action had been taken. Futch maintained no records and was unable to provide any account documentation to the Petitioner's investigator. Futch resigned as Tailormade broker-salesperson effective November 16, 1989. Futch was apparently succeeded by Bette K. Potts. In November of 1990, Jeffrey C. Cooner met with a representative of Tailormade and leased a condominium unit, providing a deposit totaling $1,125 of which $350 was a pet and security deposit. Cooner eventually vacated the unit, 2/ and attempted to obtain a refund of the security deposit. By such time, the Tailormade office was vacant and closed. Cooner has received neither an accounting nor a refund of all or part of the security deposit paid to Tailormade. According to the bookkeeper, as of December, 1990, approximately $35,000 of rental escrow funds had been removed from the Tailormade rental escrow account by Hendrickson and had not been replaced. At all times material to this case, Janet Lynn Coffing ("Coffing"), Jay Coffing's wife, was a licensed real estate broker in the State of Florida, license #0268647. Coffing's most recent license was as a broker in limbo, listing her home address as 5410 Ashton Circle, Fort Myers, Florida, 33907-7828. From approximately February 21, 1991 through approximately May 28, 1991, Coffing was licensed and operating as qualifying broker and officer for Tailormade. From approximately February 14, 1991 through approximately June 14, 1991, Coffing was licensed and operating as qualifying broker and officer for Comprehensive. Coffing was aware, almost immediately after taking over as qualifying broker and officer for the companies that the escrow funds were short. She spoke to Hendrickson (her mother-in-law) and Jay Coffing about the situation, but apparently received no assistance from them. Coffing utilized operating funds to cover escrow shortages when escrow refunds were necessary, and continued to do so until all funds were depleted. On March 18, 1991, Charles W. Pease met with a representative of Comprehensive and leased a condominium unit at 13040 Tall Pine Circle in Fort Myers, Florida, providing two checks totaling $1,650 of which $500 was a security deposit. Upon vacating the unit, 3/ Pease attempted to obtain a refund of the security deposit but the Comprehensive office was vacant and closed. Pease has received neither an accounting nor a refund of all or part of the security deposit paid to Comprehensive. At some time in 1991, 4/ Debra and Kevin Campbell met with Coffing and leased a condominium unit located at 5418 Harbor Castle Drive. At the time the lease agreement was signed, the Campbells paid a $500 security deposit to Tailormade through Coffing. Upon vacating the unit, the Campbells attempted to obtain a refund of the security deposit but were unable to locate Coffing, and the Tailormade office was vacant and closed. The Campbells have received neither an accounting nor a refund of all or part of the security deposit paid to Tailormade. At no time during the period Coffing acted as qualifying broker and officer for either Tailormade or Comprehensive, did Coffing prepare or sign written monthly escrow account statement reconciliations. Coffing did not balance escrow liabilities with the escrow assets. Coffing failed to make appropriate entries in monthly reconciliation statements which would note whether a shortage existed and whether corrective action had been taken. Coffing maintained no records and was unable to provide account documentation to the Petitioner's investigator. On several occasions beginning on July 2, 1991, an investigator from the Department of Professional Regulation visited office location identified as the registered offices of the Respondent Tailormade and Comprehensive companies. The offices were vacant and closed. The investigator contacted Hendrickson and Jay Coffing, and attempted to obtain information from them, but was unable to maintain contact with them. The companies are apparently not operational.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Professional Regulation, Division of Real Estate, enter a Final Order determining Linda Futch guilty of the violations set forth herein and providing for a fine of $1,000, and a suspension of 90 days, to be followed by a probationary period of two years. During the probationary period, Futch shall complete 60 hours of continuing education, including a 30 hour management course for real estate brokers, and shall provide to the Florida Division of Real Estate all written monthly escrow account reconciliation statements for which she is responsible. That the Department of Professional Regulation, Division of Real Estate, enter a Final Order determining Janet Lynn Coffing guilty of the violations set forth herein and providing for a fine of $1,000, and a suspension of 180 days to be followed by a probationary period of three years. During the probationary period Coffing shall complete 60 hours of continuing education, including a 30 hour management course for real estate brokers, and shall provide to the Florida Division of Real Estate all written monthly escrow account reconciliation statements for which she is responsible. That the Department of Professional Regulation, Division of Real Estate enter a Final Order revoking the licensure of Respondents Tailormade Management, Inc., and Comprehensive Management, Inc. DONE and ENTERED this 15th day of July, 1992, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 15th day of July, 1992.
The Issue Whether Respondents committed the offenses as alleged in the Administrative Complaint and the penalties, if any, which should be imposed.
Findings Of Fact Petitioner is a regulatory agency of the State of Florida charged with the responsibility of investigating and prosecuting complaints against real estate professionals, including real estate brokers and their qualified corporations. Respondent Edward J. Zibro is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0359349 in accordance with Chapter 475, Florida Statutes. Respondent Ed Zibro Realty, Inc. is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0251315 in accordance with Chapter 475, Florida Statutes. Respondent Edward J. Zibro is now and was at all times material hereto an officer of and qualifying broker for Respondent Ed Zibro Realty, Inc. The Respondents' offices are now and were at all times material hereto located at 2803 East Commercial Boulevard, Suite 202, Fort Lauderdale, Florida. Respondents and Pamela L. Mereider, d/b/a/ Earthrise Realty, Inc. (Mereider) submitted to arbitration through the Fort Lauderdale Area Board of Realtors, Inc. a dispute involving the right of Mereider to share in a commission check which had been deposited in Respondents' escrow account. By an award entered December 4, 1987, Respondents were ordered by the arbitration board to pay Mereider the sum of $1,800.00 within ten days of the date of the award. Respondents had not paid the award at the time of the final hearing. On February 15, 1989, the County Court in and for Broward County, Florida, issued a final judgment ordering the Respondents to pay to Mereider the sum of $1,800.00 plus arbitration costs of $100.00 and court costs of $58.00. This final judgment was based on the arbitration award dated December 4, 1987, which the Court found to be binding on the parties. Respondents had not satisfied the final judgment at the time of the final hearing in this proceeding. On November 13, 1987, Respondents, as agents for the seller, obtained a contract for the purchase of Crystal Lakes Chevron Station by Werner Hatzelhoffer (Hatzelhoffer). Hatzelhoffer, as buyer, placed an $11,000.00 deposit in trust with Respondents. On or about March 16, 1988 Hatzelhoffer's bank was notified that his application for financing this transaction through the Small Business Administration had been rejected. Hatzelhoffer did not obtain financing and the transaction did not close. On August 17, 1988, Hatzelhoffer requested in writing that Respondents return the $11,000.00 deposit with interest. Based on the terms of the contract executed by the parties, Respondents and the seller of the property disputed that Hatzelhoffer was entitled to a refund of the deposit. Hatzelhoffer later requested the return of the deposit money by telephone and went to Respondent's office in person to demand the refund of the deposit. On October 25, 1988, Hatzelhoffer's attorney made written demand of Respondents for the return of Hatzelhoffer's deposit. On April 21, 1989, Respondent Edward J. Zibro advised Petitioner for the first time of the conflicting demands on the escrow deposit and requested an escrow disbursement order from Petitioner. Petitioner opened an escrow disbursement case and, on May 2, 1989, Gerri E. Barnoske, a complaint analyst for Petitioner, requested in a letter certain information from Respondents relating to the escrow dispute. Respondents did not receive this letter. On June 2, 1989, Ms. Barnoske wrote to Respondents a second time. This second letter advised that the previously requested information had not been received and that failure to cooperate could result in disciplinary proceedings being brought. The second letter also advised Respondents to let Petitioner know if the matter had been settled. The dispute involving Mr. Hatzelhoffer's deposit was amicably resolved on May 30, 1989. On May 8, 1989, the seller and his wife executed an agreement which released any claim they may have had to the escrowed funds and which authorized Respondents to negotiate a settlement with Hatzelhoffer. Respondents were also authorized by the release instrument executed by the seller on May 8, 1989, to retain as their commission for the failed transaction any sums they could get Hatzelhoffer to agree was due the seller. As a result of the settlement, Hatzelhoffer was reimbursed $6,500.00 and Respondents retained $4,500.00. Upon receiving Ms. Barnoske's letter dated June 2, 1989, Respondent Edward J. Zibro advised Ms. Barnoske that he had not received her letter dated May 2, 1989. He further advised that the escrow dispute had been settled and enclosed a statement signed by Mr. Hatzelhoffer on May 30, 1989, which acknowledged that the matter had been resolved. On June 22, 1989, Petitioner filed an Administrative Complaint against Respondents which contained four counts. Count I and Count II charged Respondent Edward J. Zibro and Respondent Ed Zibro Realty, Inc., respectively, with having failed to account and deliver a share of a commission in violation of Section 475.25(1)(d), Florida Statutes, based on the dealings with Mereider. Count III and Count IV charged Respondent Edward J. Zibro and Respondent Ed Zibro Realty, Inc., respectively, with having failed to account and deliver a deposit in violation of Section 475.25(1)(d), Florida Statutes, based on the dealings with Hatzelhoffer. Respondents denied the allegations of the Administrative Complaint and timely requested a formal hearing. This proceeding followed.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that Department of Professional Regulation, Florida Real Estate Commission enter a final order which finds as follows: Respondent Edward J. Zibro guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count I of the Administrative Complaint; Respondent Ed Zibro Realty, Inc. guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count II of the Administrative Complaint; Respondent Edward J. Zibro guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count III of the Administrative Complaint; and Respondent Ed Zibro Realty, Inc. guilty of violating the provisions of Section 475,25(1)(d), Florida Statutes, as alleged in Count IV of the Administrative Complaint. IT IS FURTHER RECOMMENDED that the final order entered by Petitioner assess administrative fines against Respondents as follows: Against Edward J. Zibro in the amount of $500.00 for the violation of Count I of the Administrative Complaint. Against Ed Zibro Realty, Inc. in the amount of $500.00 for the violation of Count II of the Administrative Complaint. Against Edward J. Zibro in the amount of $500.00 for the violation of Count III of the Administrative Complaint. Against Ed Zibro Realty, Inc. in the amount of $500.00 for the violation of Count IV of the Administrative Complaint. IT IS FURTHER RECOMMENDED that the final order entered by Petitioner suspend the licenses and registration of the Respondents for a period of six months or until such time as the administrative fines are paid and the final judgement in favor of Pamela L. Mereider, d/b/a Earthrise Realty, Inc. is satisfied, whichever occurs first. DONE AND ENTERED this 29th day of November, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE 89-4205 The following rulings are made on the proposed findings of fact submitted by Petitioner: The proposed findings of fact in paragraph 1 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by paragraphs 2 and 4 of the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by paragraphs 3 and 4 of the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 3 of the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 6 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 7 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph 9 are adopted in material part by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph 10 are adopted in material part by paragraph 7 of the Recommended Order. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the result reached. The proposed findings of fact in paragraph 12 are adopted in material part by paragraph 7 of the Recommended Order. The proposed findings of fact in paragraph 13 are adopted in material part by paragraph 8 of the Recommended Order. The proposed findings of fact in paragraph 14 are adopted in material part by paragraph 8 of the Recommended Order. The proposed findings of fact in paragraph 15 are adopted in material part by paragraph 9 of the Recommended Order. The proposed findings of fact in paragraph 16 are adopted in material part by paragraph 9 of the Recommended Order. The proposed findings of fact contained in the first sentence of paragraph 17 are adopted in material part by paragraph 11 of the Recommended Order. The proposed findings of fact contained in the second sentence of paragraph 17 are rejected as being subordinate to the findings made in Paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph 18 are adopted in material part by paragraphs 10 and 12 of the Recommended Order. The proposed findings of paragraph 19 are rejected as being unnecessary to the results reached. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Edward Zibro Ed Zibro Realty, Inc. 2803 East Commercial Boulevard Suite 202 Fort Lauderdale, Florida 33308 Darlene F. Keller Division Director Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue This is a license discipline proceeding in which the Petitioner seeks to take disciplinary action against the two Respondents, one individual and one corporation, on the basis of alleged violations set forth in an eight-count1 Administrative Complaint. The Respondents are charged with violation of Section 475.25(1)(b), Florida Statutes, and with multiple violations of Section 475.25(1)(e), Florida Statutes.
Findings Of Fact The Petitioner is a state government licensing and regulatory agency charged with responsibilities and duties which include the prosecution of Administrative Complaints against licensees under Chapter 475, Florida Statutes. Respondent Hilda H. Bell is now, and was at all times material hereto, a licensed Florida real estate broker, having been issued license number 0349586 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker at Sharmic Realty, Inc., at the following address: 8701 Willes Road, Unit 16-308, Coral Springs, Florida 33067. Respondent Sharmic Realty, Inc., is now, and was at all times material hereto, a corporation registered as a Florida real estate broker, having been issued license number 0243150 in accordance with Chapter 475, Florida Statutes. The last license issued was at the following address: 8701 Willes Road, Unit 16- 308, Coral Springs, Florida 33067. At all times material hereto, Respondent Hilda H. Bell was licensed and operating as the qualifying broker of, and an officer of Respondent Sharmic Realty, Inc. On September 27, 1994, Petitioner's Investigator Margaret R. Hoskins audited Respondents' escrow accounts. The audit revealed that the Respondents maintained Property Management Escrow Account Number 00300066617 at Glendale Federal Bank, Fort Lauderdale, Florida. A total trust liability for the Respondents' Property Management Escrow Account could not be determined because the Respondents did not have complete and accurate records. On August 11, 1992, the Respondents deposited $20,000.00 into their Property Management Escrow Account for a person who did not have a checking account. On August 11, 1992, the Respondents issued escrow check number 0972 in the amount of $20,000.00. On August 18, 1992, the Respondents loaned Cecil Sailsman $500.00 from the Property Management Escrow Account. On January 12, 1993, the Respondents deposited $22,496.91 in personal funds into the Property Management Escrow Account. The Respondents subsequently disbursed $15,045.00 of the personal funds from the Property Management Escrow Account.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Florida Real Estate Commission issue a final order in this case to the following effect: Dismissing Counts III and IV of the Administrative Complaint; Concluding that the Respondents are guilty of the violations charged in Counts I, II, V, VI, VII, and VIII of the Administrative Complaint; and Imposing administrative penalties consisting of the following: An administrative fine against Respondent Hilda H. Bell in the amount of three thousand dollars ($3,000.00); A six month suspension of the real estate brokerage license of Respondent Hilda H. Bell; A one year period of probation for the Respondent Hilda H. Bell, to begin immediately following the period of suspension; A requirement that the Respondent Hilda H. Bell complete additional education in the form of a seven hour course in real estate brokerage escrow management during her period of probation; and A reprimand of Respondent Sharmic Realty, Inc. DONE AND ENTERED this 2nd day of April 1996 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, 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 2nd day of April 1996.
The Issue The issues in this case include whether Respondent is guilty of having committed culpable negligence in a business transaction or failed to maintain trust funds in a proper account until disbursement was authorized and, if so, the appropriate penalty.
Findings Of Fact Respondent has been a licensed real estate broker in the State of Florida since 1983 and holds license number 0405933. His most current license was as a broker trading as Realty Trend. Respondent started Realty Trend in 1985 for the primary purpose of managing rental properties. Although he had little or no training or experience in accounting, Respondent retained considerable responsibility for the day-to- day bookkeeping associated with his business, though at times he employed a bookkeeper. Respondent maintained one account for sales transactions, in which he participated as the broker, and one account for property management activity. Respondent participated in few sales transactions and is phasing out of that part of the business. All escrow monies held by Respondent were kept in interest-bearing accounts. Although Respondent retained the interest, he disclosed this fact to the parties through the sales contract. Within about 18 months, Respondent had acquired about 100 properties to manage. Respondent decided to automate the bookkeeping and purchased a computer program that would write checks, track income and expenses, generate reports, and generally handle all aspects of bookkeeping. The program was designed to assist in property management operations. Emphasizing service to property owners, Respondent had always tried to send his checks for rent collected the past month between the tenth and fifteenth of each month. By August, 1989, Respondent had been warned by Petitioner that he had to allow two or three weeks for tenant's checks to clear and determine what emergency maintenance expenses might be incurred. Through a combination of ignorance about bookkeeping, his responsibilities as a broker holding escrow monies, and the property management computer program, Respondent mishandled his trust account. His repeated bookkeeping errors and failure to take corrective action allowed a sizable shortage to accumulate by the time Petitioner conducted a routine office audit on November 17, 1989. Respondent cooperated fully with the audit and promptly provided Petitioner's investigator with a box full of bank statements. His account was reaudited on January 8, 1990. Poor bookkeeping prevents a precise determination of the shortage, but it exceeds $10,000. It is difficult to understand how Respondent's books became so confused as to become nearly worthless. There was no evidence of fraudulent intent. It appears as likely that Respondent overpaid property owners as that he overpaid himself. Respondent's ongoing ignorance of his serious trust account shortages or, in the alternative, repeated failure to solve recognized trust account shortages represents culpable negligence. Even by the time of hearing, Respondent candidly admitted that he could not provide an accurate figure for the shortage and had not yet been able to repay the deficiency, although he intended to do so.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order reprimanding Respondent; imposing an administrative fine of $500; requiring Respondent to complete an approved 60-hour course; suspending his license for a period of six months, commencing retroactive to the date on which Respondent cease operations due to the emergency suspension; and placing his license on probation for a period of three years following the conclusion of the suspension, during which time Respondent shall file escrow account reports with the Commission or other person designated by the Commission at such intervals as the Commission requires. DONE and ORDERED this 8 day of October, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8 day of October, 1990. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Attorney Steven W. Johnson Division of Real Estate Florida Real Estate Commission 400 W. Robinson St. Orlando, FL 32801-1772 Thomas I. McIntosh 13542 N. Florida Ave. Tampa, FL 33613 Attorney Neil F. Garfield Envirwood Executive Plaza, Suite 200 5950 West Oakland Park Blvd. Lauderhill, FL 33313 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether Respondent committed the offenses set forth in the Notice to Show Cause and, if so, what action should be taken.
Findings Of Fact Petitioner is the state agency charged with regulating yacht and ship brokers and salespersons pursuant to Chapter 326, Florida Statutes. At all times material hereto, Respondent was a licensed yacht and ship broker salesman. He has been licensed since 1990. In December 1990, Respondent was issued license number 1322, as a yacht and ship broker salesman for Seafarer Brokerage, Inc. (Seafarer). In October 1998, he renewed his license, which had an expiration date of October 28, 2000. On July 31, 1997, Lorraine Woods, the President of Seafarer, wrote to Peter Butler, section head of the yacht and ship section of the Department of Business and Professional Regulation, notifying him that Respondent was the broker of record for Seafarer. Ms. Woods' license had been suspended, and Respondent knew that her license had been suspended prior to his becoming broker of record for Seafarer. As the broker of record, Respondent knew that he was solely responsible for safeguarding the money of all clients in the brokerage's escrow account. Respondent did not know the details involving the suspension of Ms. Woods' license. He was not aware that Ms. Woods had abused the control of Seafarer's escrow account for her own benefit by taking client funds from the escrow account to pay for Seafarer's operating expenses. Mr. Butler was very concerned with the abuse of Seafarer's escrow account committed by Ms. Woods. He demanded assurance from Respondent that Ms. Woods would not have access to the escrow account, and Respondent provided that assurance. On August 4, 1997, Respondent wrote to Mr. Butler confirming that he (Respondent) was the broker of record for Seafarer. In his written communication, Respondent confirmed certain details of the escrow account of Seafarer, including that he was broker of record and that the account was located at First Union National Bank of Florida, with the address and account number listed. Moreover, Respondent indicated that, as of July 30, 1997, he became the sole signatory on the account. Respondent personally provided the signatory card, showing that he was the sole signatory on the account, to the bank. Even though the bank did not have a record of such a signatory card, the undersigned is persuaded that Respondent's testimony is credible and that he provided the signatory card to the bank. Even though Respondent was the broker of record for Seafarer, Respondent looked upon Ms. Woods as the employer and himself as the employee, resulting in an employer-employee relationship. Seafarer consisted of two persons, Respondent and Ms. Woods. If Respondent was unavailable for a situation in which a check had to be written and executed, he would prepare a blank check with his signature on it and give it to Ms. Woods. She continued to maintain the business records. Ms. Woods maintained all the operating and escrow records, checks, and bank statements in a locked drawer for which she had the only key; Respondent did not have free and unobstructed access to these documents even though he was Seafarer's broker of record. Respondent and Ms. Woods continued this procedure for over a year without incident. On April 2, 1999, Warren Scott made an offer on a 1974 CAL2-46, a 46-foot yacht, with Seafarer. He placed a $6,000.00 deposit on the yacht. Mr. Scott's dealings, regarding the yacht, were with Ms. Woods. He had dealt with Seafarer and Ms. Woods on a prior occasion, had made a deposit, and had his deposit refunded. As a result, Mr. Scott felt comfortable dealing with Seafarer and Ms. Woods even though he had not purchased a yacht from Seafarer. On April 5, 1999, Mr. Scott's check was deposited in Seafarer's escrow account. On April 5, 1999, check numbered 1144, made payable to cash for $4,305.00, bearing Respondent's signature was written. The check bore the notation at the bottom left corner at the "FOR" space: "CAL2-46 (illegible) Enterprises." This check cleared Seafarer's escrow account on April 7, 1999, leaving a balance of $2,512.34. Respondent had signed the check and left it for Ms. Woods to fill-in the details. The check was signed by Respondent in March 1999 for a closing that was taking place at the end of March, but the check was not used at the closing in March. Ms. Woods had written the check to pay the rent for Seafarer. Even though Respondent had signed the check, the undersigned is persuaded that he did not know that Ms. Woods was going to use the check for a purpose other than for what it was written. On April 27, 1999, Respondent signed a check for $100.00, payable to Complete Yacht Service for engine repair to the CAL2-46. This check cleared Seafarer's escrow account on April 30, 1999, leaving a balance of $5,796.36. After a sea trial and survey, Mr. Scott wrote to Ms. Woods on April 30, 1999, indicating that he had decided not to purchase the 1974 CAL2-46 pursuant to their arrangement of April 2, 1999. On May 3, 1999, Mr. Scott again wrote to Ms. Woods that his offer to purchase the 1974 CAL2-46 for $55,000.00 in the conditional acceptance of vessel agreement, dated April 29, 1999, was expiring on May 3, 1999, at 9:00 p.m. Mr. Scott went to Seafarer on May 4, 1999, to obtain a refund of his deposit from Ms. Woods. Respondent informed him that Ms. Woods was out and that they would have to wait for her return, which was going to be in about an hour. Mr. Scott was unable to wait. He left Fort Lauderdale, returning to Nevada, with the understanding that his deposit, less $100.00 for the engine survey, would be returned to him. Mr. Scott expected the monies within a week to ten days. On May 5, 1999, a deposit of $4,700.00 was made to Seafarer's escrow account, leaving a balance of $9,136.36. On May 5, 1999, Seafarer's escrow account contained sufficient monies to give Mr. Scott a full refund of his deposit, less the $100.00. Respondent left for a vacation to the United Kingdom on May 17, 1999, with his return on June 15, 1999. Prior to his leaving, Respondent signed two blank checks, numbered 1153 and 1154, from Seafarer's escrow account. The checks were written for an upcoming business transaction during his absence, regarding a closing and Respondent's commission on the closing. On May 18, 1999, Seafarer's escrow account balance fell to $5,192.21, after three checks cleared the account. Two of the three checks, signed by Respondent, were payable to Seafarer in the amount of $1,360.00 for "comm.-37'Irwin." During May 1999, checks totaling $6,900.00, which were signed by Respondent, cleared Seafarer's escrow account. Mr. Scott made several telephone calls to Seafarer regarding the return of his deposit. Each time Mr. Scott spoke with Ms. Woods and he was not provided with a satisfactory response from her. On June 16, 1999, Mr. Scott received a check, check numbered 1153, for $5,900.00 from Seafarer. He also received a telephone call that same day from Ms. Woods requesting him not to deposit the check until the end of the month; Mr. Scott agreed. Respondent was not aware that check numbered 1153 was going to be used to refund Mr. Scott's deposit. Respondent was unaware that the check was used for a purpose other than for what it was intended. On June 17, 1999, check numbered 1154, made payable to Seafarer for $1,000.00 for "petty cash" cleared Seafarer's escrow account. The check was used by Ms. Woods to pay Seafarer's telephone and utility bills. Respondent was unaware that check numbered 1154 was going to be used for a purpose other than for what it was written. When Respondent returned from his vacation, he was contacted by Mr. Scott who advised Respondent of the problem with the return of his refund. Respondent checked the bank statements for Seafarer's escrow account and discovered that Ms. Woods had not used the checks for their intended purpose and that she had used funds from the escrow account for improper purposes. On June 25, 1999, Mr. Scott deposited the check that he received from Seafarer. The check, payable to Mr. Scott, was posted to Seafarer's escrow account on June 29, 1999, leaving a negative balance of $2,667.22. For 67 days, between April 5, 1999, when Mr. Scott's deposit of $6,000.00 was deposited in Seafarer's escrow account, and June 29, 1999, the date Mr. Scott's refund of $5,900.00 cleared, Seafarer's escrow account did not have sufficient funds to pay the refund. The period between May 5, 1999, and May 17, 1999, was the only time period, during the 67-day period, that Seafarer's escrow account had sufficient funds to pay the refund. Mr. Scott indicates that his refund was received in his account in July 1999. Respondent remained with Seafarer long enough to ensure that Mr. Scott received his refund. On July 8, 1999, Respondent notified Mr. Butler that he was no longer the broker for Seafarer. Respondent has no prior disciplinary action.
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 Florida Land Sales, Condominiums, and Mobile Homes, enter a final order: Sustaining the Notice to Show Cause and finding that John Scales violated Subsections 326.002(1) and 326.005(1), Florida Statutes (1997). Suspending Respondent's license for three years. Imposing a civil penalty of $5,000.00. DONE AND ENTERED this 14th day of February, 2001, 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 14th day of February, 2001. COPIES FURNISHED: Janis Sue Richardson, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Tracy J. Sumner, Esquire 1307 Leewood Drive Tallahassee, Florida 32312 Ross Fleetwood, Director Division of Florida Land Sales, Condominiums, and Mobile Homes Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Barbara D. Auger, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue in this case is whether the real estate license issued to the Respondent, James P. Hudson, should be revoked or otherwise disciplined based upon the acts alleged in the Administrative Complaint.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I make the following findings of fact: At all pertinent times, Respondent, James P. Hudson, was a licensed real estate broker in the State of Florida having been issued license No. 0148841 in accordance with Chapter 475, Florida Statutes. Respondent has been operating as a broker from an office at 413 South Federal Highway, Boynton Beach, Florida 33435. Respondent maintains an escrow account No. 018200602689 at Sun Bank in Boynton Beach, Florida into which he deposits trusts funds received in his capacity as a real estate broker. Sometime in the early part of September 1989, Petitioner initiated a random audit of Respondent's business. Prior to the audit, Petitioner's investigator advised the Respondent that he would need to produce all the records related to his escrow account. An investigator for Petitioner visited Respondent's office on or about September 18, 1989 to conduct an audit of Respondent's escrow accounts. Based upon the investigator's review of the records, five different transactions were identified as allegedly involving delays or mishandling of escrow funds by Respondent. Those transactions are the basis for several of the allegations in the Administrative Complaint. Each transaction is addressed separately below. The first transaction involved a contract for the sale and purchase of real property between Fitz as buyer and Kerstin as seller (the "Fitz Contract"). Included in Respondent's files on this transaction was a copy of a contract for sale and purchase that was dated and signed by the buyer on September 6, 1989 and dated and signed by the seller on September 9, 1989. The buyer in the Fitz Contract gave Respondent a check for $1000 as a deposit to be held in escrow in connection with the transaction. The Respondent's written receipt for that check is dated September 7, 1989. The evidence established that this initial deposit check was delivered to Respondent on Thursday evening, September 7, 1989. Respondent was out of town on Friday, September 8 and returned on Monday evening, September 11. The check was deposited on the afternoon of September 12 and is reflected in the bank records as a deposit on September 13. The sellers (the Kerstins) signed the contract on September 9, 1989. However, in executing the contract, they crossed out the $900,000 sales price submitted by the buyer and increased the price to $1,400,000. In other words, the sellers made a counteroffer with respect to this contract. The initial deposit was timely returned to the sellers when the counteroffer was rejected. Petitioner's investigator erroneously assumed that Respondent did not timely collect the additional deposit required under this contract. While Petitioner's investigator considered this signed contract in Respondent's files to be a binding agreement on the parties, it is clear that the change in sales price was only initialed by the sellers and, therefore, there was no enforceable agreement. The parties to the Fitz Contract subsequently executed another written contract. This second agreement provided for a sales price of $1,100,000. That contract was executed by the buyer on September 20, 1989 and by the sellers on September 24, 1989. This second contract called for a $49,000.00 deposit upon acceptance. The buyers gave Respondent a check dated September 25, 1989 in the amount of $49,000.00. That check was deposited by Respondent in his escrow account on the afternoon of September 26, 1989. The $49,000 deposit is reflected in the bank records as being deposited on September 27, 1989. Under the circumstances, there was no undue delay by Respondent in collecting or depositing the funds into escrow. The second transaction identified by Petitioner's investigator involved a contract for the sale and purchase of real property between Campanis as buyer and Hoffman as seller. The buyer in this transaction gave Respondent a check dated September 6, 1990 to be held as a deposit for this contract. A photocopy of the check presented to Petitioner's investigator included a handwritten note that states "hold until Friday 9/8/89." The evidence did not establish who wrote this note. The evidence established that the check was received by one of Respondent's sales associates on September 7 and left on the Respondent's desk on September 8. Respondent is the only company employee authorized to deposit checks or otherwise handle transactions involving the escrow account. As indicated above, Respondent was out of town from September 8 through the evening of September 11. The check was deposited on the afternoon of September 12 and is reflected in the bank records as being credited to the escrow account on September 13. Under the circumstances, the Respondent was not delinquent in depositing these funds. The third transaction involved a contract for the purchase and sale of real property between White as buyer and Adkins as seller (the "White Contract.") The White Contract was executed by the buyer on July 26, 1989 and by one of the sellers on July 27 and by the other seller on Friday, July 28. The contract called for an initial deposit of $500.00 with an additional deposit of $1,700 upon acceptance. The initial deposit check was dated July 26, 1989. That deposit check was attached to the contract executed by the purchaser and presented to a cooperating real estate agent who was to present the proposed contract to the seller. The executed contract was not returned to Respondent until sometime during the weekend of July 29 and 30. The initial deposit check along with the additional deposit were then deposited into Respondent's escrow account on Monday, July 31, 1989. Under the circumstances, the evidence established that there was no undue delay in depositing the escrow money. The next transaction identified by Petitioner's investigator involved a contract for sale and purchase of real property between Milera as buyer and Twillie as seller (the "Milera Contract.") The Milera Contract provided for an additional deposit due upon acceptance. The contract was accepted by Twillie on August 23, 1989. The parties to the contract agreed that the time for making the additional deposit would be extended for two days. The check for the additional deposit was dated and received by Respondent on Friday, August 25, 1989. The check was deposited into Respondent's escrow account on Tuesday, August 29, 1989. Under the circumstances, there was no undue delay in depositing the escrow money. The final transaction involved a contract with the sale and purchase of real property between Gerrety as buyer and the estate of John Walsh as seller (the "Gerrety Contract.") The Gerrety Contract was executed by the purchaser on August 10, 1989. The deposit check was given to one of the Respondent's associates on that Thursday evening. The deposit check was not delivered to Respondent until after business hours on Friday, August 11. The check was deposited into Respondent's escrow account on Monday, August 14. Under the circumstances, there was no undue delay in depositing the escrow money on this transaction. During the audit, Petitioner's investigator determined that Respondent was holding deposits on two separate rental properties in his escrow account. At the time of the audit, Petitioner's investigator was not provided with any leases or other documentation regarding these transactions even though Respondent was supposed to produce records for all sums in the escrow account. Respondent contends that he did not realize he was supposed to produce his rental files, was never specifically asked to produce these files and did not know that Petitioner was questioning these transactions until he received the Administrative Complaint in this action. While there was apparently some miscommunication at the time of the audit, adequate documentation for these rental deposits was produced at the hearing. Therefore, Petitioner's allegation that Respondent did not maintain adequate documentation regarding these deposits is without merit. Petitioner has also charged that Respondent did not produce all of the deposit slips in connection with the escrow account and did not produce any evidence of reconciliation of the escrow account. The evidence at the hearing established that all deposit slips are available even though they were not all kept with the bank statements. Moreover, the evidence failed to substantiate the allegation that Respondent did not reconcile his escrow account. Thus, these charges were not substantiated. At the time of the audit, Respondent advised Petitioner's investigator that the escrow account included some commission money that had not yet been removed. In the past, Respondent would sometimes collect his commissions at the close of a transaction from the funds held in escrow. (Respondent no longer collects commissions in this manner.) In auditing Respondent's escrow account, Petitioner's investigator determined that there was an overage of approximately $8,178.17 in the account. Within thirty days of the completion of the audit, Respondent removed $7,500 of the overage which represented his commission on two previously closed transactions. While Respondent believed that the remaining amount of the overage was also his commission money, he refrained from removing any more money until completion of a year-end audit by his accountant. Respondent's records reflected a slight difference in the amount of the overage than the amount calculated by Petitioner during the audit. Respondent wanted to be absolutely certain that only the proper amount was removed from the escrow account. At the conclusion of the audit on September 18, 1989, Respondent signed an office inspection report form prepared by Petitioner which contained the following pre-printed statement: ...I certify that to the best of my knowledge all records pertaining to my sales escrow/trust account(s) and my rental property management account(s) have been provided to the investigator. The above violations are brought to my attention this date and thoroughly explained. I will take corrective action within thirty days and furnish photo/sketches of corrections and documents on the same... There is some confusion as to what additional documentation Respondent was expected to provide following the completion of the September, 1989 audit. Respondent did not believe he was required to provide any additional evidence to Petitioner or its investigator and no further documentation was provided by Respondent until Petitioner's investigator returned to his office in January of 1990. Petitioner's investigator returned to Respondent's office on January 17, 1990. At that time, $7500.00 of the overage had been removed from the escrow account. The remaining amount of the overage was removed later in January. It does not appear that Respondent provided Petitioner's investigator with copies of the rental agreements or the second contract in the Kerstin transaction during the January visit by Petitioner's investigator. Respondent contends that this information was never specifically requested. It is clear that communication between Respondent and Petitioner's investigator had deteriorated from bad to worse by the time of this January visit. There is no indication that Respondent ever used the escrow account for improper purposes or withdrew money from the escrow account for his own personal or business use. The Florida Real Estate Commission adopted new record keeping requirements regarding escrow accounts in July of 1989. The new rules require a written monthly reconciliation of a broker's escrow account. At the time of the audit, Respondent was not keeping the minimum written statement comparing broker's total liability with the reconciled bank balance of all trust accounts as required by the new rules. Even after the audit in September, Respondent did not keep the written reconciliations in the format required by the new rules. Respondent was reconciling the account on his computer.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner enter a Final Order finding Respondent not guilty of the allegations contained in Counts I and II of the Administrative Complaint, finding Respondent guilty of Counts III and IV and reprimanding him for minor and techinical violations of those counts and imposing a fine of $100.00. RECOMMENDED in Tallahassee, Leon County, Florida, this 31st day of December, 1991. J. STEPHEN MENTON 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 31st day of December, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3589 Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on each of the parties' proposed findings of fact. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Addressed in the preliminary statement. Adopted in substance in Findings of Fact 1. Adopted in pertinenet part in Findings of Fact 3. Rejected as irrelevant. Rejected as irrelevant. Adopted in substance in Findings of Fact 4. 7. Subordinate to Findings of Fact 5. 8. Subordinate to Findings of Fact 6. 9. Subordinate to Findings of Fact 7 and 8. 10. Subordinate to Findings of Fact 6. 11. Subordinate to Findings of Fact 6. 12. Subordinate to Findings of Fact 8 and 9. 13. Subordinate to Findings of Fact 8 and 9. 14. Subordinate to Findings of Fact 8 and 9. 15. Subordinate 23. to Findings of Fact 8, 9 and Subordinate to Findings of Fact 23. This subject is also addressed in paragraph 9 of the conclusions of law. Adopted in substance in Findings of Fact 10. Adopted in substance in Findings of Fact 10. 19. Subordinate to Findings of Fact 11. 20. Subordinate to Findings of Fact 13. 21. Subordinate to Findings of Fact 13. 22. Subordinate to Findings of Fact 13. 23. Subordinate to Findings of Fact 14. 24. Subordinate to Findings of Fact 14. 25. Subordinate to Findings of Fact 15. 26. Subordinate to Findings of Fact 15. Subordinate to Findings of Fact 16. Subordinate to Findings of Fact 17. Rejected as not established by competent susbstantial evidence. The subject matter is addressed in Findigns of Fact 17. Adopted in substance in Findings of Fact 19 and 20. Rejected as not established by competent substantial evidence. The subject matter is addressed to some degree in Findings of Fact 21. Subordinate to Findings of Fact 21 and 22. Subordinate to Findings of Fact 21 and 25. Adopted in substance in Findings of Fact 20. Rejected as irrelevant. Subordinate to Findings of Fact 21. Subordinate to Findings of Fact 21. The Respondent's Proposed Findings of Fact The Respondent's proposed findings of fact are not numbered. The numbers below refer to the numerical sections contained in the findings of fact section of Respondent's Proposed Recommended Order. Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. The first two sentences are adopted in substance in Findings of Fact 6-9. The second two sentences are rejected as irrelevant. This subject matter is addressed in some degree in Findings of Fact 21. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentencess are subordinate to Findings of Fact 10. The next two sentences are adopted in substance in Findings of Fact 11. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentence are adopted in substance in Findings of Fact 13. The third sentence is rejected as constituting argument rather than a finding of fact. The first three sentences are adopted in substance in Findings of Fact 14. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentences are adopted in substance in Findings of Fact 15. The last sentence is rejected as constituting argument rather than a finding of fact. Adopted in substance in Findings of Fact 16. The first sentence is adopted in substance in Findings of Fact 17. The second sentence is rejected as vague. Subordinate to Findings of Fact 17 and 25. The first three sentences are adopted in substance in Findings of Fact 18, 19 and 22. The fourth sentence is rejected as not established by competent substantial evidence. This subject matter is addressed in part in Findings of Fact 19. The fifth and sixth sentences are rejected as constituting argument rather than a finding of fact. Subordinate to Findings of Fact 25. COPIES FURNISHED: Janine B. Myrick, Esquire Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802 James P. Hudson 413 South Federal Highway Boynton Beach, Florida 33435 Darlene F. Keller Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact Louis S. Wooten, Sr. is a registered real estate broker holding license No. 0098381. Louis S. Wooten, Sr. did business at the times involved in the administrative complaint as Lou Wooten Realty. Adequate notice of this hearing was given Louis S Wooten, Sr. in the manner required by Chapter 120 and Chapter 475, Florida Statutes. Evidence was received concerning deposits and withdrawals by Louis S. Wooten, Sr. from the Louis S. Wooten, Sr. escrow account in Peoples First National Bank, Miami Shores, Florida, between August 1, 1975 and November 10, 1975, when this account was closed. These records were identified by John Fortnash, vice president of the bank. These records included the ledger for this account from May, 1975 to November, 1975, (Exhibit 1), the ledger from November, 1975, until November 1976, (Exhibit 2), the signature card showing Louis S. Wooten to be the only person authorized to draw on the account, (Exhibit 3), and sixteen (16) individual deposit slips received as Composite Exhibit 4. These records show no activity in the account subsequent to December 23, 1975, when this account had a balance of $22.00. Thereafter, the balance of this account decreased by $2.00 per month, a service charge, until November 10, 1976, when the balance reached zero and the account was closed. Concerning Count 1, Yvard Jeune and Rosita Jeune contracted on or about September 26, 1975, to purchase certain real property from Eddie Silver for $28,500. The Jeunes paid $100 as an initial deposit to Lou Wooten, Sr., and agreed to pay an additional $1,900 for a total deposit of $2,000. This additional $1,900 was paid to Lou Wooten Realty by manager's check on or about September 30, 1975. This manager's check was identified by Barry Eber, chief savings and loan officer for First Savings and Loan of Miami, and received as Exhibit 5. The Jeune contract was contingent upon FHA financing for the Jeunes. FHA financing was not approved, and the Jeunes requested return of their $2,000 in accordance with the terms of the contract. The Jeunes never received their money from Louis S. Wooten, even though they eventually brought suit against Wooten and obtained a judgment against him. The records of Wooten's escrow account do not show the deposit of the $1,900 received from the Jeunes. Regarding Count 2, on or about October 19, 1975, Emma Crockett made an offer to purchase certain real property and paid an earnest money deposit to Lou Wooten Realty in the amount of $1,000 which was receipted for by Mollie Johnson. Mollie Johnson identified the receipt signed by her and testified that this money was duly delivered to Lou Wooten. Subsequently, Crockett's offer of $29,500 was rejected by the seller, and on December 24, 1975, a demand was made for return of the deposit. The cancellation mark on the check, identified by Crockett and received as Exhibit 24, indicates that it was received by Wooten Realty. Crockett's deposit was never returned to her by Wooten. As noted above, the Lou Wooten escrow account was closed with a zero balance. Regarding Count 3, George D. Pratt, Jr. and his wife, Eloise, contracted to purchase certain real property from Gladys P. Smith on or about December 5, 1975. The Pratts paid an initial deposit of $100 to T.F. Chambers and subsequently paid an additional $665 in the form of a manager's check to Lou Wooten Realty. This manager's check was identified by Barry Eber, chief savings and loan officer, First Federal Savings and Loan of Miami, and received as Exhibit 6. Harriet Pooley, an employee of Lou Wooten Realty, identified a receipt to George D. Pratt, Jr. and Eloise in the amount of $665 which was received as Exhibit 18. A review of the ledgers of the Louis S. Wooten, Sr. escrow account indicates no deposits were made to this account subsequent to November 26, 1975. Regarding Count 4, Bettye Green paid Lou Wooten Realty a deposit of $150 on a transaction in which she and her husband offered to purchase real property owned by the Fidlers. The Greens defaulted on the contract, and were advised by their salesman, T.F. Chambers, that their deposit would be forfeited. No evidence was introduced by the Florida Real Estate Commission regarding any demand on the Fidler's behalf for the money. Regarding Count 5, Mary Redfield, a friend and representative of Goldie Brown and Bernard Brown, identified a copy of a manager's check earlier identified by Barry Eber, chief loan officer of First Federal Savings and Loan of Miami and received as Exhibit 7, as a copy of an original check for $1,500 given to her by Goldie Brown which was deposited to Wooten's escrow account. Redfield also identified a contract, Exhibit 16, and a closing statement, Exhibit 17, as documents given to her by Goldie Brown. T.F. Chambers was the salesman who handled this contract. Chambers appeared at closing, after having purchased Lou Wooten Realty from Louis S. Wooten, Sr.Chambers stated that the Wooten escrow account lacked sufficient funds to permit closing the transaction and that he had personally paid for a cashiers check in the amount of $680, the amount necessary to close the purchase. Chambers identified this check which, as a part of Exhibit 21, was received into evidence. Regarding Count 6, Alladar Paczier, counsel for Istvan and Julia Beres, identified a deposit receipt contract for a bar and restaurant (Exhibit 26) and a receipt for a $3,500 deposit signed by Louis Wooten (Exhibit 27). Paczier represented that Wooten failed to produce the deposit money at closing, and that when demand was made by Paczier of Wooten for the deposit, Wooten stated to him that he did not have the money.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the registration of Louis S. Wooten, Sr. DONE and ORDERED this 17th day of January, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission 400 Robinson Avenue Orlando, Florida 32801 Louis S. Wooten, Sr. 743 Fairlawn Drive Sebring, Florida 33870
Findings Of Fact At all times relevant hereto, Phyllis A. Crosby, Respondent, was registered as a real estate broker by the Florida Board of Real Estate, and was qualifying broker for Crosby Realty Corporation, a corporate real estate broker (Exhibit 4). Crosby had actual knowledge of the hearing scheduled to be heard September 3, 1986, and failed to appear. William Nolte and Marilyn Nolte owned a duplex in Tampa, Florida that they desired to sell. They talked with Wade Black and Dale Peterson, real estate salesmen with American Realty Company, and agreed to give American Realty Company an exclusive right of sale agreement, a listing agreement to list the property for rent before sale, and to pay a $100 commission for each tenant. The exclusive listing agreement dated February 26, 1985 was attached to Exhibit 2, deposition of Marilyn Nolte, as Exhibit 2. Pursuant to these agreements, tenants for each of the apartments were obtained and a buyer for the property was subsequently found. In March 1985, Crosby purchased American Realty's assets which included the Nolte agreements. Salesmen licenses of Black and Peterson were transferred to Crosby Realty. Rental and deposit checks from the two tenants, totalling $1,130.00, were obtained by Black and/or Peterson and delivered to Respondent. This money was never deposited into Respondent's escrow account. The Noltes demanded remittance of the $1,130.00 minus $200 (commission), or $930.00 from Respondent on numerous occasions and made numerous phone calls to the Crosby Realty Company office to obtain this money without success. On March 13, 1985, a buyer for the Nolte property was secured by Tam- Bay Realty, and the property was sold with the closing taking place June 9, 1985. Prior to the closing, Nolte wrote to the American Title Company, who closed the transaction, regarding the $930.00 owed Nolte by Respondent and this $930.00 was deducted from the commission paid Respondent. At the closing, Respondent appeared, took the check representing Crosby Realty's Commission less the $930.00 deducted to pay Nolte, and left before the final papers were signed. No commission for the rentals of the sale was ever paid by Respondent to Black or Peterson. Respondent, during 1985, had three accounts in the Citrus Park Bank in Tampa. One was the Crosby escrow account, one was the Crosby Realty general account, and one was the Phyllis A. Crosby personal expense account. Numerous overdrafts were drawn on the general account and personal expenses account and the bank notified the Respondent that these overdraft charges would be deducted from her escrow account as a set-off to keep the bank from losing money because of these overdraft charges. During June 1985, the bank debited the escrow account $88.50 (debit memo Exhibit 1), the July statement contained a debit memo of $283.00, and in August, debit memos of $126.76 and $62.88 appeared. In September 1985, Citrus Park Bank closed all of Respondent's accounts. On April 29, 1985, Respondent leased office space and a townhouse from Carlton Properties in Tampa. She signed a three-year lease effective May 1, 1985, which provided for two months free rent for the office, with tenant to make a security deposit in the amount of $817.79 (which equals one month rent) due June 1, 1985. This deposit was never made and she was evicted in July. The townhouse lease provided for two weeks free rent with the security deposit due May 15, 1985. Respondent made this payment and one additional payment, but the check for the second payment was returned marked insufficient funds. She was evicted July 22, 1985. Respondent leased office space on July 9, 1985, from Ayers-Siera Insurance Association in the Carrolwood Village Center for a broker's office. She gave the lessor a check for $842.00 for the August rent and a security deposit. She moved into the office space and the check, written on the Crosby Realty general account, bounced. It was returned for collection twice, marked insufficient funds. When run through a third time, the check was returned marked "account closed." Eviction proceedings were instituted and Respondent's furniture was moved out of the office by the Sheriff in early October. The lessor has never received any monies from Respondent. In September or early October 1985, Respondent entered into a three year lease agreement with Paramount Triangle to lease office space commencing November 1, 1985. She moved her offices into that space and occupied the premises until April or May 1986 when she departed. During the period that Respondent occupied this office space, only one rental check from her was honored by the bank. Numerous checks given to Paramount Triangle for rent were not honored by the bank. Finally, the last check from Respondent dated March 6, 1986, which Paramount Triangle tried to deposit, was returned showing the account on which the check was drawn was closed on March 4, 1986. Pamela Glass was employed as a secretary by Respondent from July 6, 1986 through August 6, 1986. During this period, Respondent refused to accept certified mail and became very angry with Glass when she once signed for a certified letter addressed to Respondent. Glass received numerous phone calls from people complaining about not being paid for billing sent to Respondent. When her pay was not forthcoming at the end of the month, Glass quit. Glass also testified, without contradiction, that Respondent held accounts for utilities under various aliases she used for this purpose. Frank Maye, investigator for Petitioner, failed to get escrow account records from Respondent when requested and made appointments with her to audit her escrow accounts which were not kept by Respondent. Failing to obtain the records from Respondent, Maye subpoenaed the records from the bank.
The Issue Whether the Petitioner, Nancy L. DeGayner, demonstrated that she is qualified to be licensed as a real estate salesperson in the state of Florida.
Findings Of Fact On or about October 7, 1996, the Petitioner, Nancy L. DeGayner, filed an application for licensure as a real estate salesperson with the Division of Real Estate. The Petitioner responded in the affirmative to question nine (9) in the application which inquired whether the applicant had been convicted of a crime. The Petitioner enclosed a written statement which stated as follows: My Real Estate License was suspended July 26, 1991, due to many allegations made against me. I was placed on probation while an intensive, thorough investigation was administered by many governmental agencies. The allegations were not substantiated. There were no convictions. I was discharged from probation. The proceedings in this case were terminated pursuant to Florida Statutes August 18, 1994; Instrument #941250; Book: 3944; Page: 1025; R. Michael Hutcheson, Judge Circuit Court Volusia County, Florida. DUI 12/14/84. Question thirteen (13) of the application inquired whether the applicant had had any license to practice a regulated profession revoked in this state upon grounds of fraudulent or dishonest dealing or violation of law. The Petitioner answered no to this question. On December 14, 1990, the Department of Professional Regulation, now the Department of Business and Professional Regulation, Division of Real Estate, filed an Administrative Complaint against the Petitioner. The Administrative Complaint alleged that: The Petitioner was guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest by trick, scheme or device, comparable negligence, and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes. The Petitioner failed to account for delivered trust funds in violation of Section 475.25(1)(d), Florida Statutes. The Petitioner failed to prepare and sign the required written monthly escrow reconciliation statements in violation of Rule 21V-14012(1)(2), Florida Administrative Code, and thereby violated Section 475.25(1)(e), Florida Statutes. The Petitioner failed to maintain trust funds in a brokerage escrow bank account or in some other proper depository until disbursement was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. The Petitioner was guilty of a course of conduct or practice which showed that she was so incompetent, negligent, dishonest or untruthful that the money, property, transactions, and the rights of investors, or those with whom she may sustain a confidential relationship, may not safely be entrusted to her in violation of Section 475.25(1)(o), Florida Statutes. On July 16, 1991, the Florida Real Estate Commission held a hearing and issued a Final Order on the Administrative Complaint filed against the Petitioner. The Petitioner failed to appear, although she had been duly served with notice of the hearing. The Commission entered its Final Order which found that the Petitioner had been served with the Administrative Complaint, that she had failed to request a hearing, that she was in default, and that a prima facie case had been established against the Petitioner in the proceedings. The facts and legal conclusions contained in the complaint were adopted as true and the Petitioner’s license was revoked. The Administrative Complaint filed by the Department of Business and Professional Regulation against the Petitioner had arisen out of acts which were the basis for criminal charges brought in the Circuit Court of Volusia County, Florida, on or about February 20, 1991, in Case No. 90-7033. These criminal charges arose out of allegations of misfeasance by the Petitioner in the management of her real estate brokerage concerns. As a result of these charges, the business records of these concerns were seized by the law enforcement officials, and the Petitioner was charged with multiple counts of grand theft. Based upon the evidence presented at the hearing, it is clear that the Petitioner entered a plea of convenience to two (2) counts of grand theft, a third degree felony. As a result of the Petitioner's plea, the Circuit Court entered its Order withholding adjudication and placing the Petitioner on probation for a period of five (5) years. A special condition of the probation was that the Petitioner should make restitution of the funds which she had allegedly taken from accounts placed in her trust. The funds and all of the Petitioner’s business accounts were placed in the registry of the court and from those funds restitution was made to all of the Petitioner’s clients. The circumstances indicate that the Petitioner had the money on hand in her business accounts to meet all of the obligations to her clients at the time the charges were brought, and she had not taken any of the money entrusted to her. At the conclusion of the accounting and reimbursement of the clients, the court discharged the Petitioner’s probation and entered an Order to that effect on August 2, 1994. (See transcript, at page 30, et seq.) Since her conviction, the Petitioner has been continually employed. She was employed with Perkins Family Restaurant from November 1991 until November 1996. She was employed as a salesperson of advertising for WROD from December 1996 to May 1997. She was employed at the Daytona Beach Regency from May 1997 until July 1997 and has been employed with Winston/James Development since July 1997 in a non-real estate capacity. The Petitioner has been responsible for the money of her employers and the monies of others entrusted to her in all of the jobs at which she has been employed. Following her plea and the entry of the Order of Probation, the Petitioner sought the permission of her probation officer to leave the state and moved to her mother's home in Wisconsin in early 1991. She was employed thereafter in businesses unrelated to real estate.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Florida Real Estate Commission enter its Final Order approving the Petitioner’s Application for Licensure as a real estate salesperson; however, because of the previous problems related to the Petitioner’s management of professional accounts, it is recommended that an entry be made to her licensure file that she may not be granted a license as a real estate broker without the Commission’s reconsideration of her qualifications to manage such accounts. DONE AND ENTERED this 13th day of November, 1997, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 13th day of November, 1997. COPIES FURNISHED: Michael Teal, Esquire William R. Alexander, Esquire 114 West Rich Avenue DeLand, Florida 32720 Manuel E. Oliver, Esquire Suite 107 South Tower 400 West Robinson Street Orlando, Florida 32801 Henry Solares, Division Director Department of Business and Professional Regulation 400 West Robinson Street Orlando, Florida 32302 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Richard T. Ferrell, Secretary Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Richard Shindler has been a licensed real estate salesman in the State of Florida, having been issued License No. 0395044. The last license issued was as a salesman with Global Real Estate & Management, Inc. At all times material hereto, Respondent Global Real Estate & Management, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued License No. 0223589. At all times material hereto, Mark H. Adler was licensed and operated as the qualifying broker and officer of Global Real Estate & Management, Inc. Adler's license is currently under suspension by agreement with Petitioner as a result of the activities complained of in the Administrative Complaint filed in this cause. At no time has Respondent Shindler been a director or officer of Respondent Global Real Estate & Management, Inc. At all times material hereto, Respondent Shindler has been the sales manager for Respondent Global Real Estate & Management, Inc. As the sales manager, Respondent Shindler sometimes helped other salesmen structure financing and helped them with other problems. Respondent Shindler was not responsible for the collection of funds from individual salesmen. Each individual salesman was responsible for collecting funds from any real estate transaction and giving those funds to Respondent Global's bookkeeper for deposit. As sales manager, Shindler was a signatory on the escrow account in order to make disbursements for small transactions mainly involving rental properties. In addition, Respondent Shindler was responsible for the hiring and firing of office personnel. However, he had no control over the contracts of other salesmen. On March 13, 1989, Respondent Shindler, as a private purchaser, made two purchase offers for two pieces of property owned by the same sellers. The purchase offers were for $115,000 and $80,000, respectively, and required that Respondent Shindler place $6,000 and $5,000, respectively, into Respondent Global's escrow account as a deposit on the purchase of the properties. Respondent Global and real estate broker Jay Hirsch were to receive commissions on the sale of the properties. Those offers to purchase disclosed in writing that Respondent Shindler was also a licensed real estate salesman. Although both offers to purchase were accepted by the sellers, the transactions involving the purchase of these properties did not close due to Respondent Shindler's inability to obtain financing, which was a contingency of the contracts. In October, 1989, demands for the release of the escrowed monies were made by the sellers and by the sellers' broker Jay Hirsch. They made demand upon Respondent Global's attorney. Additionally, Jay Hirsch made demand on Mark Adler by telephone and then by demand letter to Adler, who, as the qualifying broker for Respondent Global, was responsible for the release of the escrowed funds. Subsequent to the demands made by the sellers and their broker, Respondent Global filed a complaint for interpleader. The escrowed deposits were eventually disbursed pursuant to a settlement among the parties claiming an interest in the escrowed deposits. In March, 1990, Petitioner began an investigation of the Respondents and Adler. Investigators Castro and Rehm both participated in the investigation. Investigator Castro believed Respondent Shindler to be the office manager of Respondent Global. During the initial interview with Respondent Shindler, he produced records which indicated that a deposit of $14,265.69 had been made on January 13, 1989, into Respondent Global's escrow account. This check had been given by Respondent Shindler to Global's bookkeeper for deposit. This deposit represented proceeds from the sale of property owned by Respondent Shindler's brother Paul, and was placed in escrow in anticipation of the offers to purchase made by Respondent Shindler on the two properties involved in this cause. Investigator Rehm examined the escrow account bank records and determined that for a two-month period the escrow account balance had dropped below the minimum $11,000 balance required by the two contracts in question herein alone. Initially, Respondent Shindler advised the investigators that the bank where the escrow account was maintained had represented that it had debited the escrow account as a result of a lien placed on that account by the Internal Revenue Service. Upon further investigation, Respondent Shindler advised the investigators that the bank itself had withdrawn $3,200 from Global's escrow account to cover a shortage in Respondent Global's operating account. At all times material hereto, both Adler and Respondent Shindler were signatories on the escrow account. As part of its investigation, Petitioner served a subpoena on Maria Aguerra, Respondent Global's bookkeeper, requesting from Adler, or Respondent Shindler, or the custodian of records for Respondent Global Real Estate, all contracts, leases, agreements, monthly bank statements, deposit slips, and cancelled checks for all accounts for the period of January 1, 1989, through March 22, 1990. Some of the requested documents were initially unavailable because they had previously been sent to the Florida Real Estate Commission. Although Adler testified that he was initially unaware that a subpoena had been served, he was given a 30-day extension to produce the records when he met with investigators Castro and Rehm on May 1, 1990. Although Adler had both the responsibility for and control over the records of Respondent Global, he was not fully familiar with the records, and the bookkeeping was in disarray. At all times material hereto, Adler, as the broker for Respondent Global, was responsible for operating the Global office, for overseeing Global's escrow account, for reviewing contracts, and for being aware of the day-to-day events in the Global office. In addition, as the broker, Adler was required to be an officer of the corporation, to be a signatory on the escrow account, to have prepared and to sign the monthly escrow account reconciliations, and to respond to Petitioner if there were complaints or requests for production of documents. Adler, as the broker for Respondent Global, did not reconcile and sign escrow account statements on a monthly basis since he was not aware of the requirement that he do so. However, Adler did testify that he was aware of his responsibility for escrowed funds. At no time did Respondent Shindler have the responsibility to maintain Global's escrow account or to reconcile the escrow account on a monthly basis. At no time did Respondent Shindler represent that he was the broker for Respondent Global or that he was a broker. Respondent Shindler did not state to investigator Rehm that he was acting as the broker for Global or that Adler had simply lent Adler's license to Shindler to use. At no time did Adler and Respondent Shindler enter into an agreement whereby Shindler would act as the broker for Global using Adler's broker's license, and Adler was never paid any monies for any use of his broker's license. Adler testified that his involvement with Global's business had declined as he had pursued his growing interest in performing appraisals.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered: Dismissing Counts II, III, VII, VIII, and IX of the Administrative Complaint filed herein; Finding Respondent Global Real Estate & Management, Inc., guilty of the allegations contained in Count V of the Administrative Complaint; and Ordering Respondent Global Real Estate & Management, Inc., to pay a fine in the amount of $500 by a date certain. RECOMMENDED in Tallahassee, Leon County, Florida, this 20th day of March, 1991. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4522 Petitioner's proposed findings of fact numbered 2-5, 7-9, 11-12c, 13, 14, and 16 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed finding of fact numbered 6 has been rejected as being unnecessary for determination of the issues herein. Petitioner's proposed findings of fact numbered 10, 15, and 17 have been rejected as not being supported by the weight of the credible evidence in this cause. Petitioner's proposed finding of fact numbered 12d has been rejected as being irrelevant to the issues under consideration herein. Respondents' proposed findings of fact numbered 1-22 have been adopted either verbatim or in substance in this Recommended Order. The transcript of proceedings, together with Petitioner's Exhibits numbered 3, 5, and 8-14 and Respondents' Exhibit numbered 1 which were admitted in evidence. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate - Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Harold M. Braxton, Esquire 9100 South Dadeland Boulevard Suite 400 - One Datran Center Miami, Florida 33156 Jack McRay General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
