The Issue The issue is whether Petitioner’s application for licensure as a real estate broker should be approved.
Findings Of Fact Petitioner has been a licensed real estate sales associate since 2000. His license number is 693538. Most of Petitioner’s work in the real estate industry has involved business transactions, but he has also handled transactions involving residential properties. On August 23, 2004, Petitioner filed an application for licensure as a real estate broker. Petitioner disclosed in the application that, in July 2003, his sales associate license was suspended by the Commission for 30 days and that he was placed on probation for a period of six months. That disciplinary action was based upon a single incident that occurred on or about November 7, 2001. Petitioner agreed to the disciplinary action as part of a “Stipulation” to resolve an Administrative Complaint charging him with fraud and misrepresentation in violation of Section 475.25(1)(b), Florida Statutes (2001), and with having operated as a broker without a license in violation of Sections 475.42(1)(a) and 475.25(1)(e), Florida Statutes (2001). The Administrative Complaint contained the following “essential allegations of material fact,” which were admitted by Petitioner as part of the Stipulation: On or about November 7, 2001, Respondent, a seller’s agent, facilitated a purchase and sale transaction between Buyer and Seller. On or about November 7, 2001, [Petitioner] was not registered with a broker.[1] The transaction referenced above failed to close. Buyer released a $1,000.00 payment to Seller. [Petitioner] submitted the $1,000.00 payment to Seller. [Petitioner] instructed [Seller] to execute a check in the amount of $500.00 payable to “Cash.”[2] [Petitioner] accepted the $500.00 payment as his own payment for services. The Final Order adopting the Stipulation was filed with the agency clerk on June 25, 2003. Petitioner’s suspension commenced on July 25, 2003, which is “thirty days from the date of filing of the Final Order.” The suspension ended 30 days later, on August 24, 2003. Petitioner’s probation ran “for a period of six (6) months from the Effective Date [of the Stipulation],” which was defined as the date that the Final Order was filed with the agency clerk. As a result, the probation period ran from June 25, 2003, to December 25, 2003. Petitioner was required to complete a three-hour ethics course and a four-hour escrow management course during the probation period, which he did. Petitioner has not been subject to any other disciplinary action. Petitioner has taken several continuing education courses in addition to those required as part of his probation. He is working towards certification by the Graduate Realtor Institute. Petitioner has taken the classes necessary to become a real estate broker, and he passed the broker examination. Petitioner has worked for broker Phillip Wetter since March 2005. Petitioner manages the day-to-day operation of Mr. Wetter’s brokerage firm. His responsibilities include preparing listings, negotiating contracts, and handling escrow funds. He has been involved in over 50 successful real estate transactions under Mr. Wetter’s supervision. According to Mr. Wetter, Petitioner is meticulous in his work, including his handling of escrow funds, and he always makes sure that he “dots all his ‘I’s’ and crosses all his ‘T’s’.” Petitioner acknowledged in his testimony before the Commission and at the final hearing that what he did in November 2001 was wrong. He credibly testified that he has learned from his mistake. In his testimony before the Commission and at the final hearing, Mr. Wetter attested to Petitioner’s honesty, ethics, good moral character, as well as his qualifications to be a broker. That testimony was unrebutted and is corroborated by the letters of support from Petitioner’s former clients that are contained in his application file, Exhibit R1. Mr. Wetter’s opinions regarding Petitioner’s fitness for licensure as a real estate broker are given great weight. Those opinions are based not only on his personal observations as Petitioner’s current qualifying broker, but also on his personal experience with Petitioner representing him in several business transactions while Petitioner was working for other brokers.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Division issue a final order approving Petitioner’s application for licensure as a real estate broker. DONE AND ENTERED this 22nd day of November, 2005, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 22nd day of November, 2005.
Findings Of Fact At all times relevant hereto, respondent, Robert A. Sempell, was a licensed real estate broker having been issued license number 02178232 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). Respondent, Virginia Bloise, was also a licensed real estate broker having been issued license number 0376974. Respondent, Home Shoppe, Inc., is a corporation registered as a broker having been issued license number 0229887. When the events herein occurred, the firm was located at 2610 North Federal Highway, Boynton Beach, Florida. Sempell operated as qualifying broker for Home Shoppe, Inc., from November 14, 1983, until October 12, 1984, Bloise was a salesperson with the same firm from July 9, 1984, until October 18, 1984, when she assumed the position of broker of record. Ilana Frank was the firm's only licensed salesperson, and she worked for the firm from 1983 until around January, 1986. In February, 1984, Frank represented Morgan King, an individual interested in purchasing a home located at 502 Northeast Second Street, Delray Beach, Florida. The property was listed with Douglas Rill and Associates, Inc., a West Palm Beach real estate firm. The home was owned by Joseph Michell, a Pratt-Whitney employee being transferred to Texas, and he had turned it over to TransAmerica Relocation Service, Inc. (TransAmerica), a firm that handled real estate sales for Pratt-Whitney employees who were relocating to other areas of the country. Deciding to purchase the property, King executed a standard contract on February 20, 1984 to purchase the home for $125,000. The contract contained a clause providing that the purchase was contingent on King obtaining a Veterans Administration (VA) loan in the amount of $122,250 at a 12 1/2 percent interest rate. 3/ A closing date of May 20, 1984, was established by the parties. The contract provided further that King would make a $1,200 cash deposit and that, pursuant to an addendum executed on February 22, he could rent the house until closing at a rate of $628 per month. Finally, the contract required that King give an extra $3800 to be deposited in escrow before moving into house, and within 45 days after the contract was executed, to 'submits' an additional $3,000. The addendum provided, however, that the $8,000 was "nonrefundable." After King signed the original contract, he gave Frank a $1,200 deposit. Frank, who was not a signatory on the firm's escrow account, carried the money to Sempell who placed his signature on the contract as an acknowledgment of receipt of deposit. Whether the money was deposited into the firm's escrow account is not of record. In any event, King did not have the extra $3800 needed to satisfy the initial deposit requirements of the contract. To ensure that a closing could be held, Frank approached Alan D. Mentser, a real estate salesman with another firm, Bob Railey's Realty, Inc., and asked if he would loan King the money until the anticipated closing on March 30, 1984. 4/ Mentser agreed to do so with the understanding that the $3800 would be placed immediately in an escrow account until closing. When he loaned the money, Mentser was under the impression that the money would be held in the escrow account of Douglas Rill, the listing broker. Because Mentser did not feel comfortable loaning the money to King, a person who he did not know, he required Frank to sign a promissory note on February 24, 1984 in the amount of $3800. At the same time, King signed an identical promissory note for $3800 payable to Frank. In addition, Frank orally agreed with Mentser that, for the use of his $3800 until March 30, 1984, she would pay him $1200 interest, or a handsome thirty percent return on his money. The $1200 was to be taken out of Frank's portion of the broker commission split. However, Mentser recognized that he was not a participating broker or salesman in the transaction and had no formal claim to the escrowed money in a realtor capacity. Indeed, the loan to Frank was personal in nature, and although Mentser intended it to be used as a part of the deposit, it was not considered a part of the real estate transaction. On February 24, Mentser gave Frank $3800 in cash which she promptly gave to Bloise the same day. Bloise was a signatory on the firm's trust account and had authority to make deposits and disbursements. After Bloise prepared a deposit receipt, Frank used $300 of the $3800 to purchase renter's insurance for King and deposited the remaining $3500 in Home Shoppe, Inc.'s escrow account at the Bank of South Palm Beaches in Lantana. The $300 deduction was made pursuant to an agreement by all parties. After King took possession of the property, he failed to qualify for a VA loan. Sometime later, he moved out of the house with no notice to the realtors or seller and gave no forwarding address. His whereabouts are unknown. TransAmerica later instituted eviction proceedings in order to legally take possession of the property. A final judgment of eviction was obtained on July 6, 1984. By now March 30, 1984, had come and gone and Mentser was eager to get his money. He initially contacted Frank but learned something had gone awry with the contract. When his informal requests to Frank were unsuccessful, Mentser engaged the services of an attorney who wrote a certified letter on May 4 to Sempell demanding a refund of his money from the firm's escrow account. After the letter was returned three times, the attorney had the letter hand- delivered to the firm's address where Frank signed for it. There is no evidence that Sempell was given the letter. After Mentser contacted Frank about his money, Frank spoke to Bloise on several occasions concerning Mentser's inquiry. The dates of these conversations are not of record. In any event, Bloise told her that a "dispute" had arisen over the escrow deposit and until it was resolved by the Division, Mentser could not get his money. This was not true since Bloise never turned the matter over to the Division for resolution. On July 12, 1984, the seller made a formal claim for the full deposit on the ground King had breached the contract and forfeited the deposit. Although there is no specific evidence as to the disposition of the claim, it may be reasonably inferred that TransAmerica's claim has not been honored. On August 6, 1984, Mentser obtained a default judgment against Frank in circuit court and was awarded $3800 in damages, prejudgment interest of $160, attorney fees of $300, and fees and costs of $50, or a total of $4310. He wisely did not request that he also be awarded the $1200 interest for the use of his money. The judgment has never been satisfied. Sempell went "out of the country" sometime in 1984 and was absent for much of the year. There is no evidence he received any demands for Mentser's money before he resigned as broker of record nor is there evidence that he was a signatory on Home Shoppe, Inc.'s escrow account. Indeed, the president of the bank in which the firm's escrow account was placed knew only that Bloise was a signatory on the account. Further, copies of cancelled checks written on the account and introduced into evidence reflected only Bloise's signature. The allegation that in October, 1984, Sempell absconded with certain funds from the firm's escrow account was not addressed at hearing and has been disregarded. Partial bank records of the firm's escrow account reflect that the $3500 was properly deposited into the account on February 27, 1984. As of December 28, 1984, the balance in the account had dropped to $1,688.98, which meant at least a part of the deposit had been spent for other purposes. Whether these expenditures occurred before or after Sempell resigned as broker of record is unclear. In any event, Bloise acknowledged to a Division investigator in May, 1987, that she had written a number of checks on the account for her own use. She justified this action by explaining that Frank had told her that the $3800 was their "own" money and could be spent "to run the business." Bloise also confirmed that, when this controversy arose, she was the only signatory on the firm's account and that Sempell had no authority to write checks or make disbursements.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondents be found guilty of violating Subsections 475.25(1)(b), (d) and (k), Florida Statutes (1983), and that the broker licenses of Bloise and Home Shoppe, Inc. be suspended for five years. Sempell's broker license should be suspended for one year. DONE AND ORDERED this 20th day of July, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 20th day of July, 1988.
Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 21st day of July, 1987.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts were found: Respondent, Robert E. Zimmerly (Zimmerly) is a licensed real estate broker having been issued license No. 0127833, with last known address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a real estate broker. Respondent, Haines City Realty, Inc. (Haines City) is a licensed corporate real estate broker having been issued registration No. 0146307, with its last known business address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a corporate real estate broker. Haines City's license is currently in an inactive status. At all times pertinent to these proceedings, Zimmerly was the sole broker, of and for Haines City, and was its President. Several weeks prior to April 23, 1981, the date N. B. Willoughby (Willoughby) signed the first offer to purchase the property (offer), Zimmerly along with Barbara Costello (Costello) and Chancellor I. Hannon (Hannon) showed the property described as "Lots 230 and 233 of the Lucerne Park Fruit Association Subdivision, P1at Book 3, Page 67, Public Records of Polk County, Florida" (property), consisting of approximately 20 acres and contiguous to the city limits of Winter Haven, Florida to Willoughby, a prospective buyer, along with Ray Workman (Workman), Willoughby's associate. Costello at the time was a sales person for American Realty of Haines City, now known as American Realty of Polk County, Inc., (American Realty). Zimmerly was representing Haines City. Hannon was representing Ridge Holding Association, Inc., (seller) the owner of the property. The property had originally been listed with Haines City but presently was considered as being listed with American Realty. Subsequent to having seen the property, Willoughby instructed Zimmerly to prepare an offer to purchase, with a purchase price of $70,000, subject to the condition, among others, that the seller would obtain a special exception for a mobile home park. A deposit check for $500 was submitted along with the offer. Costello submitted the offer to Hannon for seller. Sometime around April 25, 1981, Hannon notified Costello that the seller had rejected Willoughby's offer because of the condition concerning a special exception for mobile home park. Within a day, Costello notified Zimmerly of the rejection. Zimmerly requested rejection in writing which Hannon did not furnish until May 11, 1981 due to his involvement in personal matters. Willoughby was not notified of seller's rejection of his first offer until around May 11, 1981. On April 27, 1981, after a verbal notification by Costello of rejection of Willoughby's offer, Zimmerly prepared and submitted an offer to purchase (Ridge offer) from Ridge Crest, Ltd., Agent, (This was apparently meant to be Ridge Crest Villas, Ltd.) signed by Bob Zimmerly, a general and limited partner, to seller, with a purchase price of $72,000, subject to the condition, among others, that seller furnish a letter requesting a special exception for mobile homes park. The Ridge offer was submitted to Hannon for the seller and was accepted by seller on May 5, 1981. On May 18, 1981 Willoughby submitted his second offer to purchase (second offer), with deposit, to seller through Zimmerly. The second offer was identical to the first offer except for the deletion of the condition requiring a special exception for mobile home park. Zimmerly did not advise Willoughby at this time, or at any other time material to the transaction, that Zimmerly was involved in an attempted purchase of the property through Ridge Crest Villas, Ltd. even though the Ridge offer had been accepted on May 5, 1981. Although the Ridge offer indicated a closing date of May 15, 1981, the transaction did not close for reasons not clear in the record, until May 27, 1981. The warranty deed and the mortgage deed executed on day of closing shows Ridge Crest Villas, Ltd. as the Grantee and Mortgagor, respectively. The deposits submitted with both of Willoughby's offers were timely refunded by Zimmerly. Willoughby was notified by Hannon after the closing that his second offer was rejected. On November 6, 1980, a limited partnership known as Ridge Crest Villas Ltd., was filed with the Secretary of State. The record is not clear, but apparently this limited partnership was involuntarily dissolved for failure to file an annual report and on October 14, 1981, an identical limited partnership, with the same name was filed with the Secretary of State. Both limited partnerships listed Robert E. Zimmerly as a general partner with 5 percent interest and listed Robert E. Zimmerly and Dolores J. Zimmerly as limited partners with 45 percent and 50 percent interests, respectively. Respondent Zimmerly's testimony was that: (1) he wanted a written (firm) rejection before notifying Willoughby because of previous dealings with Willoughby; (2) it is not uncommon to use limited partnerships in real estate transactions because of the availability of tax advantages when using a limited partnership; (3) he was acting for Jones and Destefano when he made the offer and purchased the property in the name of the limited partnership; (4) he intended for Jones and Destefano to own the property through the limited partnership and took a promissory note for the down payment; (5) he did not advise Willoughby of his involvement in the purchase of the property, other than in general terms "that some fellows from up north are interested" (Destefano is "from up North") because he had been taught in real estate schools, and it was his policy, not to discuss one prospective buyer's offer with another prospective buyer; and (6) it is common practice to have a "backup" offer as with Willoughby's second offer because you are never sure if a particular transaction will close. Mainly, this testimony went unrebutted by the petitioner.
Recommendation Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that respondent be found guilty of a violation of Section 475.25(1)(b), Florida Statutes 1981) For such violation, considering the mitigating circumstances surrounding the violation, it is RECOMMENDED that the Board issue a letter of Reprimand and impose an administrative fine of $1,000.00. DONE and ENTERED this 10th day of May, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 10th day of May, 1985. COPIES FURNISHED: James R. Mitchell Staff Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street Suite 308 P.O. Box 1900 Orlando, Florida 32802 Arthur C. Fulmer, Esquire P.O. Drawer J Lakeland, Florida 33802 Mr. Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802
Findings Of Fact The Department of Business and Professional Regulation, Division of Real Estate (Petitioner), is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints filed pursuant to Chapters 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. At all times material hereto, Robert A. Schwartz (Respondent) was a Florida licensed real estate broker, having been issued license number 0481297, with an address of American Real Estate Properties, Inc., 13833 Wellington Trace, West Palm Beach, Florida. Respondent was initially licensed on or about May 23, 1988. At all times material hereto, Respondent was the qualifying broker and officer of American Real Estate Properties, Inc. (American Real Estate). On or about May 18, 1992, Respondent met with Ms. Renate Schuetze in West Palm Beach. 4/ Ms. Schuetze was from the State of New York and was interested in buying lots, building homes on the lots and renting the homes. Respondent had been referred to Ms. Schuetze by her friend, Ms. Mary Ann Runer. A few years ago, on behalf of Ms. Runer and using monies provided by her, Respondent had purchased a lot in West Palm Beach, overseen the contracting and construction of her home on the lot and rented out the home. All for which he charged Ms. Runer a fee. Ms. Schuetze wanted Respondent to do the same for her. On that same day, after meeting with Respondent, visiting prospective lots and model homes with him and discussing his process and procedure, Ms. Schuetze gave Respondent a check for $15,120 made payable to American Real Estate and returned to New York. Although Ms. Schuetze noted on the check that the money was for a deposit on one of the model homes, the monies were actually for a deposit of $2,000 on two certain lots ($1,000 each) and Respondent's fee of $13,000 ($6,500 per house) 5/ for performing the same service for her that he had performed for Ms. Runer. Ms. Schuetze wanted to pay Respondent his fee in advance instead of waiting until the homes had been built and rented. This was the first time that Respondent had received his fee in advance. The following day, on May 19, 1992, Respondent deposited the $15,120 into the operating account of American Real Estate which did not have an escrow account. Furthermore, Respondent had no intentions of opening an escrow account. However, the day before, on May 18, 1992, Respondent wrote two checks for $1,000 each to Miki S. Murray Realty (Murray Realty) for a deposit on two certain lots on behalf of Ms. Schuetze, leaving a balance of $13,120 from the monies given by her to Respondent. The deposits held the lots for Ms. Schuetze. On May 19, 1992, Murray Realty completed a document entitled "Reservation Deposit" for each of the lots. The document represented an acknowledgment of a deposit and the terms associated therewith. Murray Realty sold the lots and the homes to be constructed as a package deal. Each Reservation Deposit indicated, among other things, a lot deposit of $1,000 on a certain lot, the location of the lot, the purchase price of the house to be constructed on the lot, the representative for the builder/seller (Murray Realty), and the buyer who was indicated as Respondent. Also, each Reservation Deposit indicated that the deposit was an "earnest money deposit," that the contract was to be entered into on June 10, 1992, and that the deposit could be returned for any reason on or before June 10, 1992. Murray Realty required no further monies until after the signing of a contract for purchase from which construction draws would come from an account specifically setup for that purpose. This was not the first time that Respondent had entered into such a transaction with Murray Realty. Respondent used the same transaction for Ms. Runer. From on or about May 12, 1992, through on or about June 1, 1992, Respondent wrote checks from American Real Estate's operating account, totalling $10,403.01, from the remaining $13,120 given to Respondent by Ms. Schuetze. The expenditures were for Respondent's own use and benefit; none were associated with the services requested by Ms. Schuetze. On or about June 1, 1992, Respondent sent a completed contract for sale and purchase of the lots and homes and a blank buyer-broker contract, by express mail, to Ms. Schuetze for her signature. The contract for sale and purchase reflected that a "deposit" of $15,120 had been paid to American Real Estate, as seller, toward the purchase price and that the deposit was being held in "escrow." The blank buyer-broker agreement contained spaces for Respondent to insert an agreed upon fee but these were also left blank. Prior to sending these documents, Respondent had discussed the contracts with her and informed her that he was sending them to her. At the same time, on or about June 1, 1992, Ms. Schuetze wrote to Respondent requesting the return of her "deposit" of $15,120 within three days, indicating that she had decided not to sign a contract for the purchase of the homes. After she received the contracts, Ms. Schuetze returned them to Respondent unsigned. At no time prior to June 1, 1992, had Respondent presented to Ms. Schuetze for her signature a buyer-broker contract or a contract for sale and purchase. At no time pertinent hereto has Ms. Schuetze executed a buyer-broker contract or a contract for sale and purchase. Not having received a response to her letter of June 1, 1992, on or about June 8, 1992, Ms. Schuetze again made a demand by way of a letter for return of the $15,120 within three days. On or about June 11, 1992, at the request of Ms. Schuetze, Murray Realty returned her deposit of $2,000 on the two lots. At that time, Respondent had not contacted Murray Realty regarding her request, and he was unaware that Murray Realty had returned the deposit. Shortly thereafter, but also in the month of June 1992, Respondent agreed to return the $13,120, less the value of services he had already rendered, to Ms. Schuetze but requested additional time in which to so do since he had spent the money. She agreed to give Respondent additional time. On or about December 4, 1992, Respondent gave a statement to Petitioner in which he agreed to return, within 12 months, the $13,120 less 10 percent for the services that he believed that he had already rendered, leaving a balance of $11,808 to be returned. At the time of hearing on October 13, 1993, Respondent had failed to refund any of the money to Ms. Schuetze. Respondent has no history of disciplinary action.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order DISMISSING Count II of the amended administrative complaint; and SUSPENDING the broker's license of Robert A. Schwartz for five years. Provided, however, that the duration of his suspension may be lessened upon the return to Ms. Schuetze of the $13,120. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 26th day of May 1994. ERROL H. POWELL 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 26th day of May 1994.
Findings Of Fact The Respondent, Joseph J. Kowitt, is now a licensed real estate broker-salesman, having been issued License No. 0048987. At all times pertinent to this proceeding the Respondent was registered and licensed by the Florida Real Estate Commission or the Board of Real Estate, respectively, as a non- active real estate broker. The Respondent's registration certificate bore an effective date of October 1, 1978 and an expiration date of September 30, 1980. Some time prior to October 9, 1979, Mrs. Frieda Frank of Silver Spring, Maryland, was contacted by Mr. Douglas Bradshaw, a broker-salesman in the employ of Powis Properties, Inc., a corporate real estate broker of Boca Raton, Florida, to ascertain her interest in selling two unimproved lots in Palm Beach County, Florida. Mrs. Frank, the owner of the property, indicated to Mr. Bradshaw that he should coordinate activities involved in effecting a sale through her cousin, the Respondent. Mrs. Frank had previously instructed the Respondent to attempt to sell the two lots for her for a certain minimum price. The Respondent was contacted by Mr. Bradshaw either shortly before or shortly after he contacted the seller of the property, Mrs. Frank, but after the Respondent had placed signs on the property indicating it to be for sale by the owner, with the Respondent's telephone number depicted thereon. Upon being contacted by Mr. Bradshaw or Powis Properties, Inc., the Respondent explained that he was not the owner of the property, but that he represented his cousin, Mrs. Frank, who lived in Maryland. The result of the conversation was that the Respondent agreed to give Mr. Bradshaw an "open listing" and the Respondent requested that he be reimbursed for any expenses born personally in preparing for and effecting a sale, indicating that this was his cousin's wish also. There is no evidence to reflect the precise amount of expenses incurred by the Respondent in attempting to sell his cousin's property, his testimony simply consisting of statements to the effect that he had erected four or five signs on the property during the course of the year preceding the sale and had incurred gasoline expenses traveling between the property in Palm Beach County and his home in north Dade County. On approximately October 9, 1979 Powis Properties, Inc. secured an offer to purchase the subject property in the amount of $27,000 and communicated that offer to the seller. She indicated to Mr. Kowitt that a $30,000 sales price would be acceptable, including a 10 percent brokerage fee for Powis Properties who had secured the prospective buyer. At approximately this point in time an agreement was reached between Mr. Kowitt, the Respondent, and Powis Properties, Inc. whereby Mr. Kowitt would receive $500 for his services rendered in effecting the sale and which would he paid to him at the closing of the sale of the two subject lots. This arrangement is reflected in the Respondent's own Exhibit 2, although the Respondent maintained the fee arrangement agreed upon was merely for reimbursement of his expenses incurred in preparing the property for sale and was not a referral fee, as Mr. Stingene of Powis Properties had represented in the letter which is Exhibit Two. The Respondent, however, in the face of the Petitioner's showing that a flat fee of $500 was paid with the understanding of the Petitioner's chief witness that it was for a referral or for "services rendered," offered no concrete evidence to establish what his alleged expense items consisted of nor their respective amounts. A purchase offer was redrawn at the required price of $30,000 in accordance with the seller's wishes and accepted by the seller. The transaction proceeded to closing on October 28, 1980. Approximately three days prior to the closing date, Powis Properties, Inc. inquired of the Registration Division of the Board of Real Estate regarding the status of Mr. Kowitt's registration as a realtor and was informed that he held an inactive status at that time. Powis Properties, Inc. communicated this information to Mr. Kowitt who indicated that his registration renewal application was in process and apparently such was not yet reflected in the records of the Board of Real Estate. Powis Properties, through Mr. Powis or Mr. Stingene, then requested that he evidence his valid registration at the closing in order to receive the subject $500 fee. Powis Properties then drew a check of $500 payable to Mr. Kowitt and authorized its sales agent who would be present at the closing to deliver the check to Mr. Kowitt upon his establishing proof of his registration or otherwise inform him that the fee would have to be held in escrow until he could establish the fact of his active registration. At the closing Mr. Kowitt delivered to the salesman representative of Powis Properties, Inc. a photocopy of registration Certificate No. 0048987 indicating on its face the status of "active broker" and based upon that representation, the sales agent delivered to Mr. Kowitt the $500 check which he later negotiated. Petitioner's Exhibit 7, which was unrefuted, reveals that the Respondent held Certificate No. 0048987 which is a non-active broker's certificate issued October 21, 1976 with an expiration date of September 30, 1980. Petitioner's Exhibit 8 was not contradicted and reveals that the Respondent applied for a renewal as a broker-salesman on October 27, 1979, the day prior to the subject closing. After amending his application to that for a broker-salesman certificate, since he did not maintain an office, a broker- salesman certificate was issued to the Respondent with an effective date of November 6, 1979, although with a date of issuance of December 20, 1979 (Exhibit 9). The dates reflected on Exhibit 9 corroborate the Petitioner's showing (in Exhibit 5) that it is the policy of the Board that a registration certificate reflect the effective date to be the date the request was received by the Board in proper form, as opposed to the date of mailing. At the closing the Respondent represented that he was an active broker by the display of a xerox copy of his registration certificate with the above number and expiration date of September 30, 1980. Be acknowledges and admits that he altered the copy of the certificate to remove the prefix "non" from his ostensible designation as an active broker, but the Respondent contends that he informed the representative of Powis Properties at the closing that he had been assured by "someone" with the Board of Real Estate that he could consider himself an active broker upon posting of his renewal application and fee. Shortly after the closing, Mr. Powis or his agent examined the ostensible broker certificate copy supplied them by the Respondent. Upon the belief that the copy of the broker certificate was irregular when compared to other broker certificates which simply state "broker" rather than "active broker" (as the subject one did after the alteration) inquiry was made by phone to the Registration Division of the Board regarding the Respondent's true status. The Board informed Powis Properties that Mr. Kowitt at that time continued to be a non-active broker. Powis Properties then immediately notified Mr. Kowitt of the circumstances and made demand that he return the $500 fee. After a period of days or weeks had elapsed without satisfactory response from Mr. Kowitt, the subject complaint initiating these proceedings was filed by Powis Properties with the Board of Real Estate. Finally, a meeting was held on November 19th between the Respondent and Powis Properties or its agent or representative, at which time the Respondent could not yet supply concrete evidence of his registration as an active broker or broker-salesman, although the application for active status remained pending. Thus, Powis Properties, Inc. continued to maintain its claim against the Respondent for return of the $500 fee and the Petitioner initiated these proceedings.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, as well as the candor and demeanor of the witnesses, it is RECOMMENDED that the Respondent, Joseph J. Kowitt, be found guilty of a violation of Section 475.25(1)(b) Florida Statutes (1979), as well as Section 475.42(1)(a), Florida Statutes (1979), and that the penalty of a public written reprimand be imposed on the Respondent. DONE AND ENTERED this 18th day of May, 1981 in Tallahassee, Leon County, Florida. P. MICHAEL RUFF, 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 18ths day of May, 1981. COPIES FURNISHED: Ralph Fetner, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph J. Kowitt 2030 South Ocean Drive Apartment No. 1227 Hallandale, Florida 33009
The Issue Did Frederick Anthony III, Inc., employ persons who were not licensed? Did Benjamin Foster have knowledge that these individuals were employed? Was Benjamin Foster responsible for the employment of unlicensed individuals? Was Benjamin Foster liable for Anthony John Bascone's actions as a real estate salesman? Did Benjamin Foster violate Sections 475.42(1)(c) and 475.25(1)(a), Florida Statutes?
Findings Of Fact Notice of the formal hearing was given to all parties as required by the statutes and rules. Benjamin C. Foster is a real estate broker holding License No. 0151634 issued by the Board of Real Estate. Frederick Anthony III, Inc. (FA III), is a Florida corporate real estate broker holding License No. 0215470 issued by the Board. Foster was the active firm member of the corporation. Donald McDonald and Delores McDonald were employed by FA III. While so employed, both of these persons engaged in the sale of real estate. Neither Delores McDonald nor Donald McDonald were licensed at the times in question. Foster agreed to be the active firm member for FA III because Anthony John Bascone and Frederick Hall, a real estate salesman, wanted to start a brokerage firm. Bascone and Hall had business connections with whom Foster wanted to affiliate, and Foster concluded that his function as active firm member with FA III would lead to business opportunities for FA III and for Foster's other real estate business. Bascone and Hall were corporate officers of FA III and managed the day-to-day activities of the office. They hired Donald and Delores McDonald as salespersons. Foster never met Delores McDonald and did not employ her. Foster met with Donald McDonald, Delores McDonald's husband, who said he was selling real estate at that time. Foster sent Donald McDonald to Bascone and Hall to be interviewed. Under Foster's agreement with Bascone and Hall, they would make the initial hiring determinations for their sales personnel and Foster would process the personnel as salespersons affiliated with the company. According to Foster's agreement with Bascone, Bascone would not engage in real estate sales until after he was license. Bascone was seeking a brokerage license, and it was their intent that Bascone would become the active firm member. The allegations involving Bascone's acting as a real estate professional were based on a transaction which was undisclosed to Hall or Foster until after the fact. This transaction involved the payment of a commission directly to Bascone by the seller which was unreported to Foster or Hall. Foster did not exercise close supervision over the activities of FA III.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the license of Benjamin C. Foster be suspended for three months, and that the license of Frederick Anthony III, Inc., be revoked. DONE and ORDERED this 3rd day of March, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 March, 1982. COPIES FURNISHED: Xavier J. Fernandez, Esquire 2701 Cleveland Avenue, Suite 10 Post Office Box 729 Fort Myers, Florida 33902 Mr. Benjamin C. Foster 5354 Emily Drive, Southwest Fort Myers, Florida 33908 Frederick Anthony III, Inc. 3920 Orange Grove Boulevard North Fort Myers, Florida 33903 C. B. Stafford, Executive Director Board of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue is whether respondent's license as a real estate broker should be disciplined for the reasons cited in the administrative complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Respondent, Robert Lee Fountain, Jr. (Fountain), is a licensed real estate broker having been issued license number 0214081 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, Fountain's license was in limbo with a home address of 2124 Shady Oaks Drive, Tallahassee, Florida. At one time, respondent also held a license as a certified building contractor issued by the Construction Industry Licensing Board (Board). Certified copies of documents received in evidence establish that on February 14, 1989, the Board issued an administrative complaint charging respondent with various violations of Chapter 489, Florida Statutes (1987), in conjunction with a construction job undertaken by respondent in Leon County, Florida. After an evidentiary hearing was conducted and a Recommended Order entered, the Board issued a Final Order on April 24, 1991, revoking respondent's license for gross negligence, incompetence and misconduct in the practice of contracting and imposing upon him an administrative fine in the amount of $10,750.00. The order also dismissed charges of fraud and deceit. That order is now final and although respondent disputes the findings in the order which resulted in his license being revoked, he does not deny that the order was rendered and the above action being taken by the Board. The record (transcript and exhibits) which underpins the Board's final order was not entered into evidence in this proceeding. Further, there is no evidence of record that respondent intentionally violated any statute or rule governing the use of either his contractor or real estate licenses.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the Florida Real Estate Commission enter a final order dismissing all charges against respondent. RECOMMENDED this 24th day of June, 1992, in Tallahassee, Florida. DONALD R. ALEXANDER 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 24th day of June, 1992.
Findings Of Fact At all times pertinent to the allegations herein, the Petitioner, Division of Real Estate, (Division), was the state agency responsible for the regulation of the real estate profession in Florida. At the same time, Respondent, Thomas Twitty, Jr. was a licensed real estate broker in Florida, operating under license number 0090569, and was broker for the Respondent, Twitty and Company, Ltd., which operates under license number 0211681 at 13090 B. Starkey Road, Largo, Florida. Respondent, Lonnie A. Fitton, was a licensed real estate salesman under license number 0442127. On March 12, 1985, while employed as a salesman with Twitty & Company, Ltd., Fitton solicited and obtained from James L. Schneider a sales listing for Schneider's house located at 1316 Kennywood, Largo, Florida. The listed sales price was $129,500.00. Mr. Schneider had purchased the property, along with another individual no longer involved, Mr. Daly, from Pioneer Federal Savings and Loan Association in December, 1984 for $50,000.00 in a distress sale. The property had been occupied but was abandoned, and Pioneer, which had held the mortgage on it, gained title in a foreclosure action. When Schneider purchased the house, it was in poor condition. The walls and cement slabs on which it rested were severely cracked in numerous places. The foundation, pool decking, and decorative block walls were severely cracked, and it was determined that this condition was due to an abnormal settling and subsidence of the ground on which the house had been constructed. This settling caused and continues to cause door and window frames to fall out of square resulting in a poor fit and, in many cases, large gaps and along the window and door parameters. After Mr. Schneider purchased the property, Fitton, along with Fitton's father, both of whom resided next door to the property in question, assisted Mr. Schneider in making repairs to the property. Cracks were filled in with cement, plaster and caulking, and the property was painted which covered up the filled in cracks and gaps which had existed. When the repairs were completed, the property was put on the market with Fitton securing the listing. There is little evidence as to how the repairs were made to the property other than that the cracks were filled and painted. No effort was made to correct the soil conditions which underlay the problem. No evidence was produced to indicate whether the corrective actions taken by Mr. Schneider, along with the Fittons, was appropriate to correct problem causing the cracks or if filling was the appropriate method of correction. Also, it was not clearly established how much and of what nature the work was accomplished by Respondent, Fitton. Whereas he indicates his participation was limited to only carrying away trash and debris, Ms. Renshaw indicates he was actively engaged in actual repair work. Whatever the actual work involvement, it is clear that he knew of the condition of the house and was familiar with the steps taken to correct the deficiencies. In May, 1985, Yvonne L. and Lorraine Renshaw, sisters, were shown the property by Diane Y. Palcelli (Booth), a salesperson employed by a different realty company. The Renshaws made an initial offer of $96,000.00, and Ms. Palcelli transmitted the offer, through Fitton, (and Twitty & Co.), to Mr. Schneider who resided out of state. A series of proposals by both sides followed and ultimately, on June 1, 1985, the parties agreed upon a sales price of $106,000.00. After the sales price had been agreed upon and the contract for sale signed, during the interim period leading up to closing, which was held in late July, 1985, the Renshaws, along with their agent and friends, visited the property on numerous occasions even going so far as to commence decorative work to fix it up to their tastes. Also during this period, Fitton, who had done some work on the repairs to the property, advised his broker, Twitty, that there had been defects in the property and asked if it was necessary to disclose this. Mr. Twitty, who himself had, at this point, not seen the property, asked if the defects had been corrected, and when told that they had been, advised Fitton it was not necessary to make any further disclosure. During the course of their repeated visits to the property, the Renshaws noted some minor cracking which they brought to Fitton's and Daly's attention. Fitton mentioned this to Twitty who suggested they have someone out to look at them. Someone was called, reportedly an engineer, who looked at the cracks and agreed to fix them. Daly indicated insurance would cover the repairs and agreed to have the cracks repaired. They were. Ms. Palcelli, (Booth), also advised the Renshaws to have the property examined by their own expert to insure it was structurally sound. The Renshaws did not do this. The sale was closed on July 23, 1985 for the $106,000.00 purchase price and both Fitton and Twitty & Co. received their respective shares of the commission. Several months after the closing, the Renshaws noticed cracks beginning to open in the walls of the house and between the pool deck and the house wall. They contacted Ms. Palcelli, (Booth) who examined the property and then tried to contact Fitton. Both Fitton and Twitty disclaimed any responsibility for the damage. Thereafter, the Renshaws filed suit against Schneider, Daly, Fitton, Twitty and Twitty & Company in Circuit Court in Pinellas County alleging one Count of fraud and one Count of grand theft. On February 22, 1991, the Court entered its Order granting Defendants', (Respondents') Motion to Dismiss the Count alleging grand theft, but denied a similar motion relating to the fraud Count. That same date, the Court entered a Final Judgement concluding that the knowing representation the property was in "excellent" condition when they knew it was not, in an anticipation of making a profit on the sale, constituted fraud. Twitty was faulted for not having inquired of Fitton, his "novice employee", more thoroughly before advising him no disclosure to the buyers was necessary. Fitton is faulted by the Court for having: ... intentionally, knowingly and fraudulently misrepresented to the [Renshaws] the high quality, excellent condition and good value of the property, intending that the [Renshaws] would rely on those representations; [they] hid the true condition of the property from the [Renshaws] and induced them to make the purchase, believing that they were purchasing a quality property worth the price being asked. The Court also concluded that the [Respondents] were obligated to disclose to the [Renshaws] the information and knowledge which they had regarding the cracking and repairs. Fitton has moved for a rehearing on the basis that the property was described as excellent on the listing sheet by Mr. Schneider, not by him. However, he was obviously aware of the condition of the property from his frequent visits to the site while it was being readied for sale. In addition, the Judgement has now been appealed to the Second District Court of Appeals by Twitty and Twitty & Company, Ltd..
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that a Final Order be entered herein providing that: The salesman's license of Respondent, Lonnie A. Fitton, be reprimanded, and he be placed on probation, under such terms and conditions as may be stipulated by the Division, for a period of two years, and The licenses of Respondents, Thomas J. Twitty, Jr. and Twitty & Co., Ltd., be reprimanded and they be placed on probation, under such terms and conditions as may be stipulated by the Division, for a period of six months. RECOMMENDED this 21st day of March, 1991, 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 21st day of March, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-1608 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 5. Accepted and incorporated herein. 6. Accepted and incorporated herein. 7. Accepted and incorporated herein. 8. Accepted and incorporated herein. 9. Accepted and incorporated herein. 10. Accepted and incorporated herein. 11. First, second and fourth sentences accepted and incorporated herein. Third sentence modified to reflect that Fitton concealed but Twitty was culpably negligent in failing to disclose. FOR RESPONDENT, TWITTY AND TWITTY & CO. LTD.: 1. & 2. Accepted and incorporated herein. 3. Accepted. 4. Accepted. 5. Accepted and incorporated herein. 6. Accepted. 7. Accepted and incorporated herein. 8. 9. Accepted, but Twitty's agent, Respondent, Fitton, worked on and was familiar with the condition of the property prior to sale. Accepted. FOR RESPONDENT, FITTON: 1. Accepted and incorporated herein. 2. Accepted and incorporated herein. 3. Accepted. 4. Accepted except for the assertion that the individual who viewed the cracks was an engineer. There was no proof of this. Accepted and incorporated herein. Accepted and incorporated herein. COPIES FURNISHED: Steven W. Johnson, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Dominic E. Amadio, Esquire 100 34th Street North, Suite 305 St. Petersburg, Florida 33713 Daniel J. Grieco, Esquire 19139 Gulf Blvd. Indian Shores, Florida 34635 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene Keller Division Director Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32801
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at the "formal hearing," and the record as a whole, the following findings of fact are made: Respondent is now, and has been since October of 2000, a licensed real estate sales associate in the State of Florida, holding license number 695252. He is currently associated with AAA Realty, Inc., a broker corporation doing business in Broward County, Florida. From March 1, 2001, through June 26, 2001, Respondent was an active real estate sales associate with Allen Real Estate, Inc. (Allen), a broker corporation doing business in St. Lucie County, Florida. From June 27, 2001, through August 13, 2001, Respondent was an active real estate sales associate with Realty Unlimited, Inc. (Unlimited), a broker corporation (affiliated with GMAC Real Estate) with offices in Port St. Lucie and Stuart, Florida. Unlimited is now, and has been at all times material to the instant case, owned by Kevin Schevers, a Florida-licensed real estate broker. Gary Sprauer is a Florida-licensed real estate sales associate. He is currently associated with Unlimited. Like Respondent, Mr. Sprauer began his association with Unlimited on June 27, 2001, immediately after having worked for Allen. Respondent and Mr. Sprauer worked as "partners" at both Allen and Unlimited. They had an understanding that the commissions they each earned would be "split 50-50" between them. On February 7, 2001, Allen, through the efforts of Respondent and Mr. Sprauer, obtained an exclusive listing contract (Listing Contract) giving it, for the period of a year, the "exclusive right to sell," in a representative capacity, commercial property located at 3800 South Federal Highway that was owned by Vincent and Renee Piazza (Piazza Property). Paragraphs 6 and 7 of the Listing Contract addressed the subjects of "compensation," "cooperation with other brokers," and "dispute resolution," respectively, and provided, in pertinent part as follows as follows: COMPENSATION: Seller will compensate Broker as specified below for procuring a buyer who is ready, willing, and able to purchase the Property or any interest in the Property on the terms of this Agreement or on any other terms acceptable to Seller. Seller will pay Broker as follows (plus applicable sales tax): 8% of the total purchase price or $15,000 maximum, no later than the date of closing specified in the sales contract. However closing is not a prerequisite for Broker's fee being earned. * * * (d) Broker's fee is due in the following circumstances: (1) If any interest in the Property is transferred . . . , regardless of whether the buyer is secured by Broker, Seller or any other person. * * * COOPERATION WITH OTHER BROKERS: Broker's office policy is to cooperate with all other brokers except when not in the Seller's best interest, and to offer compensation to: Buyer's agents, who represent the interest of the buyer and not the interest of Seller in a transaction, even if compensated by Seller or Broker Nonrepresentatives Transaction brokers. None of the above (if this box is checked, the Property cannot be placed in the MLS). * * * 10. DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claim and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the parties. . . . Shortly after they left the employ of Allen and began working for Unlimited, Respondent and Mr. Sprauer showed Nicholas Damiano the Piazza Property. Mr. Damiano thereafter made a written offer to purchase the Piazza Property, which the Piazzas accepted, in writing, on July 4, 2001. The sales price was $165,000.00. Mr. Damiano put down a $10,000.00 deposit, which, in accordance with paragraph 2(a) of the contract between Mr. Damiano and the Piazzas (Sales Contract), was "held in escrow by [Unlimited]." The obligations of Unlimited, as escrow agent, were described in paragraph 6 of the Sales Contract, which provided as follows: ESCROW. Buyer and Seller authorize GMAC, Realty Unlimited Telephone: . . . Facsimile: . . . Address: . . . to receive funds and other items and, subject to clearance, disburse them in accordance with the terms of this Contract. Escrow Agent will deposit all funds received in a non- interest bearing account. If Escrow Agent receives conflicting demands or has a good faith doubt as to Escrow Agent's duties or liabilities under this Contract, he/she may hold the subject matter of the escrow until the parties mutually agree to its disbursement or until issuance of a court order or decision of arbitrator determining the parties' rights regarding the escrow or deposit the subject matter of the escrow with the clerk of the circuit court having jurisdiction over the dispute. Upon notifying the parties of such action, Escrow Agent will be released from all liability except for the duty to account for items previously delivered out of escrow. If a licensed real estate broker, Escrow Agent will comply with applicable provisions of Chapter 475, Florida Statutes. In any suit or arbitration in which Escrow Agent is made a party because of acting as agent hereunder or interpleads the subject matter of the escrow, Escrow Agent will recover reasonable attorneys' fees and costs at all levels, with such fees and costs to be paid from the escrowed funds or equivalent and charged and awarded as court or other costs in favor of the prevailing party. The parties agree that Escrow Agent will not be liable to any person for misdelivery to Buyer or Seller of escrowed items, unless the misdelivery is due to Escrow Agent's willful breach of this Contract or gross negligence. Paragraph 12 of the Sales Contract addressed the subject of "brokers" and provided as follows: BROKERS. Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker other than: Listing Broker: Allen Real Estate, Inc. who is a transaction broker and who will be compensated by x Seller _ Buyer _ both parties pursuant to x a listing agreement _ other (specify) Cooperating Broker: GMAC Realty Unlimited who is a transaction broker who will compensated by _ Buyer x Seller _ both parties pursuant to _ an MLS or other offer of compensation to a cooperating broker _ other (specify) (collectively referred to as "Broker") in connection with any act relating to the Property, included but not limited to, inquiries, introductions, consultations and negotiations resulting in this transaction. Seller and Buyer agree to indemnify and hold Broker harmless from and against losses, damages, costs and expenses of any kind, including reasonable attorneys' fees at all levels, and from liability to any person, arising from (1) compensation claimed which is inconsistent with the representation in this Paragraph, (2) enforcement action to collect a brokerage fee pursuant to Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller, which duty is beyond the scope of services regulated by Chapter 475, F.S., as amended, or (4) recommendations of or services provided and expenses incurred by any third party whom Broker refers, recommends or retains for or on behalf of Buyer or Seller. The Damiano/Piazza transaction was originally scheduled to close on July 25, 2001. At the request of the Piazzas, the closing was rescheduled for August 7, 2001. A few days before August 7, 2001, Mr. Sprauer asked Respondent "where the closing was going to take place" and "what title company" would be handling the matter. Respondent replied that the closing was "going to be delayed again because Mr. Damiano . . . was going to have to have some type of cancer surgery." It turned out that the closing was not "delayed again." It took place on August 7, 2001. At the closing were Mr. Damiano, the Piazzas, Respondent, and the closing agent from the title company, First American Title Insurance Company (First American).3 Neither Mr. Schevers, nor Mr. Sprauer, was in attendance. Mr. Sprauer did not even know that the closing was taking place. He was under the impression, based on what Respondent had told him, that the closing had been postponed. Had he not been misinformed, he would have attended the closing. Respondent did not contact Mr. Sprauer following the closing to let him know that, in fact, the closing had occurred. Mr. Schevers, on the other hand, was made aware that closing would be held on August 7, 2001. He was unable to attend because he had "prior commitments." It was Respondent who informed Mr. Schevers of the August 7, 2001, closing date. The morning of August 7, 2001, Respondent went to Unlimited's Stuart office and asked Mr. Schevers for the $10,000.00 Unlimited was holding in escrow in connection with the Damiano/Piazza transaction, explaining that he needed it for the closing that was going to be held later that day. Before complying with Respondent's request, Mr. Schevers contacted First American and asked that he be faxed a copy of the United States Department of Housing and Urban Development Settlement Statement (HUD Statement) that First American had prepared for the closing. As requested, First American faxed a copy of the HUD Statement to Mr. Schevers. Upon reviewing the document, Mr. Schevers "immediately noticed that [it indicated that] the entire commission [of $7,000.00] was going to Allen." Mr. Schevers "then proceeded to call First American" and asked why Unlimited was not "reflected on this settlement statement." Mr. Schevers was told that a First American representative "would get right on it and get back to [him]." Mr. Schevers did not wait to hear back from First American before handing an "escrow check" in the amount of $10,000.00 to Respondent. He instructed Respondent, however, to "not give anybody this check unless that statement [the HUD Statement] [was] changed and reflect[ed] [Unlimited's]" share of the commission earned from the sale of the Piazza Property. He further directed Respondent to telephone him if this change was not made. Respondent did not follow the instructions Mr. Schevers had given him. He delivered the $10,000.00 "escrow check" to the closing agent at the closing, even though the HUD Statement had not been changed to reflect Unlimited's sharing of the commission. At no time during the closing did Mr. Schevers receive a telephone call from Respondent. According to the HUD Statement that Mr. Damiano, the Piazzas, and the closing agent signed at the closing, Allen received a commission of $7,000.00 "from seller's funds at settlement." The document makes no mention of any other commission having been paid as part of the closing. On or about August 9, 2001, Respondent received a "commission check" from Allen. The check was made payable to Respondent and was in the amount of $3,000.00. Under the "DOLLARS" line on the check, the following was typed: 4200 Total Comm[4] 1200 ADVANCE[5] Typed next to "MEMO" on the bottom left hand corner of the check was "DAMIANO-PIAZZA 165,000 S&L." It has not been shown that the "commission check" Respondent received from Allen was for anything other than the commission Allen owed Respondent for services performed when Respondent was still employed by Allen. Mr. Schevers' consent to Respondent's receiving this $3,000.00 "commission check" was neither sought nor given. Less than a week after the closing, having spotted Mr. Damiano mowing grass on a vacant lot that Mr. Damiano owned, Mr. Sprauer walked up to him and asked "how his surgery [had gone]." Mr. Damiano "acted very surprised [like] he didn't know what [Mr. Sprauer] was talking about." Mr. Damiano's reaction to his inquiry led Mr. Sprauer to believe "that the closing had probably taken place." He "immediately contacted [Mr. Schevers] and asked him to check into it." Mr. Schevers subsequently learned from First American that Allen "had gotten all of the [commission] check" at the closing. Mr. Schevers then telephoned Respondent. This was the first communication he had had with Respondent since before the closing. Respondent told Mr. Schevers that "he got the check" and "he would be right over with it." Respondent, however, did not keep his promise. After his telephone conversation with Respondent, Mr. Schevers discovered that Allen "had cut [Respondent] a check and [Respondent] had gone immediately and deposited it." This discovery prompted Mr. Schevers to place another telephone call to Respondent. This telephone conversation ended with Mr. Schevers telling Respondent "he was terminated." Mr. Schevers thereafter notified Petitioner in writing that Respondent was no longer associated with Unlimited. He also filed with Petitioner a complaint against Respondent alleging that Respondent had "acted inappropriately" in connection with the Damiano/Piazza transaction. Mr. Schevers had expected Unlimited to receive, for the role it played in the Damiano/Piazza transaction, "50 percent of the total commission," or $3,500.00, in accordance with the provisions of the "multiple listing service for St. Lucie County."6 He holds Respondent responsible, at least in part, for Unlimited's not receiving these monies.7 At the time of the Damiano/Piazza transaction, Unlimited had contracts with its sales associates which provided that the associates would receive "70 percent of the net" of any commission Unlimited earned as a result of the associates' efforts. Had Unlimited received a commission as a result of the Damiano/Piazza transaction, it would have "split" it with Respondent and Mr. Sprauer as required by the contracts it had with them.8
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint issued against Respondent in the instant case in its entirety. DONE AND ENTERED this 7th day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 7th day of July, 2004.
