The Issue Whether respondent committed the acts alleged in the Administrative Complaint, and, if so, whether respondent's license should be revoked, suspended or otherwise disciplined.
Findings Of Fact At all times pertinent to the charges, Reynold Diaz was a licensed real estate broker in the State of Florida, having license number 0379909. The respondent was registered under the trade name of "Progressive Developers" from August 20, 1983 to July 25, 1986. Respondent, in his capacity as a real estate broker, managed four rental units owned by John H. Stephen located at 3405-3407 Nebraska Avenue, Tampa, Florida. Mr. Stephen initially met Mr. Diaz when Mr. Stephen purchased the rental properties from him in 1984, and Mr. Stephen retained respondent to manage the properties at a fee of ten percent of the monies collected. At the end of April, 1985, respondent rented one of the units owned by Mr. Stephen to Ms. Roslyn Thompson. During the course of Ms. Thompson's tenancy, the respondent received from Ms. Thompson a total of $630.00, which represented two months rent and a security deposit of $180.00. None of this money was returned to Ms. Thompson and none of it was delivered to Mr. Stephen by respondent. When Mr. Stephen inquired about the rental money from the unit, in June or July of 1985, Mr. Diaz advised Mr. Stephen that the tenant had not paid her rent for a couple of months. Thereafter, Mr. Stephen went to the rental unit to talk to Ms. Thompson about her payments. Ms. Thompson advised Mr. Stephen that she had paid her rent and produced receipts for the $630.00 which she had paid to respondent. Mr. Stephen terminated respondent's services in June of 1985. In September of 1985 Mr. Stephen met with Mr. Diaz in an attempt to obtain an accounting of the monies received by respondent from Mr. Stephen's tenants. Although respondent had provided monthly statements and payments to Mr. Stephen throughout 1984, respondent stopped providing statements in 1985. Thus, Mr. Stephen had not received a statement in April, May, or June of 1985. When Mr. Stephen met with respondent in September, respondent failed to provide a full accounting of the money he had received from Mr. Stephen's tenants and failed to deliver the money he had received. However, subsequent to the meeting, Mr. Stephen did receive from respondent the amount he was owed on two of the rental units. However, respondent failed to deliver the money he had received from Ms. Thompson. Respondent contends that of the $630.00 he received from Ms. Thompson, he paid Mr. Stephen $225.00 in September and then paid the $405.00 balance in two installments. However, the evidence does not support this contention, and I accept Mr. Stephen's testimony that he never received any rent payments on the Thompson unit. Further, although the evidence does show that respondent paid Mr. Stephen $405.00 in two checks, these payments were for the money owed on the other rental units. Mr. Diaz has failed to account for or deliver to Mr. Stephen the $630.00 received from Ms. Thompson. Respondent, in his capacity as a real estate broker, also managed rental property owned by Sandra K. Nelson located at 1208 East Chelsea Street, Tampa, Florida. Ms. Nelson first met Mr. Diaz when she purchased the rental property, and she retained respondent to manage the property at a fee of ten percent of the monies collected. In August of 1984, the respondent rented the Nelson property to Joseph Ira Pasco. At the time of renting the unit, the respondent received from Mr. Pasco a security deposit of $325.00. However, Mr. Diaz advised Ms. Nelson that Mr. Pasco had not paid his security deposit, and withheld $275.00 from a rental payment to hold as a security deposit. Subsequently, after Ms. Nelson started eviction proceedings, she discovered that Mr. Pasco had a receipt signed by Mr. Diaz for a $325.00 security deposit. However, despite Ms. Nelson's demands, the respondent failed to deliver to Ms. Nelson the $325.00 security deposit or any portion thereof. Further, the security deposit was not returned to Mr. Pasco. However, respondent did ultimately deliver to Ms. Nelson the $275.00 that he had retained from the rental payment. Respondent maintained an escrow account at the Hay Gulf Federal Credit Union from August 8, 1984 until November 26, 1984, when the account was closed. When petitioner's investigator, Leo Huddleston, requested of the respondent all documentation associated with the Stephen and Nelson transactions, respondent produced the carbon copies of three deposit slips and twenty checks drawn on the Bay Gulf account. The documents covered only the months of September and October of 1984, and none of the documents appear to be connected to the Stephen and Nelson transactions. The respondent failed to produce his real estate brokerage escrow account statements, his business records, leases, contracts or other documentation required to be kept by the respondent and produced to the petitioner upon request. At no time did respondent place or maintain the $325.00 security deposit on the Nelson property in an escrow or trust account. Further, since respondent's escrow account was closed at the times respondent collected the rent money and deposit from Ms. Thompson, it is apparent that none of the $630.00 was placed in an escrow or trust account. Respondent admitted that he did not properly handle the funds received from the Nelson and Stephen properties, stating that he managed the properties on the basis of friendship rather than a professional basis. However, he did admit retaining ten percent of all the money collected. From August 20, 1983, until July 25, 1986, the respondent was registered with the Real Estate Commission under the trade name "Progressive Developers." However, at various times during this period, the respondent transacted business both as "Progressive Real Estate Developers" and "Progressive Real Estate Developers, Inc." These names were not registered with the Real Estate Commission.
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 suspending respondent's license for a period of two (2) years and imposing an administrative fine of $1,150 to be assessed as follows: Counts I and VI, $200 for each count; Counts II and VII, $200 for each count; Counts III and VIII, $100 for each count; Count IV, $100; and Count V, $50. Respectfully submitted and entered this 9th day of March, 1987, in Tallahassee, Florida. DIANE A. GRUBBS 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 9th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3775 Petitioner's Proposed Findings of Fact: Accepted in paragraph 1. Accepted in paragraph 2. Accepted in paragraph 3. Accepted in paragraphs 5 and 6. Accepted in paragraph 7. 6-7. Accepted in paragraph 8. Accepted generally in paragraphs 6 and 8. Accepted in paragraph 10. Accepted in paragraph 9. Accepted in paragraph 11. Respondent's Proposed Findings of Fact: Accepted that respondent managed Mr. Stephen's property. Second sentence rejected as irrelevant; further, the evidence established that Mr. Stephen first met Mr. Diaz when Mr. Stephen purchased the subject property from Mr. Diaz and retained him to manage it. Third sentence accepted in paragraph 10. Fourth sentence rejected as to the money received from Ms. Thompson, but accepted that money was delivered to Mr. Stephen in paragraph 6. Last sentence rejected as not a finding of fact. Accepted that $275 was paid to Ms. Nelson in paragraph 8; however, reject by contrary finding that the $275 payment was partial payment on the $325 security deposit. Reject, for lack of any evidence that improper name registration was computer error. Remainder rejected as not findings of fact. COPIES FURNISHED: James R. Mitchell, Esquire Harold Huff, Executive DPR - Division of Real Estate Director 400 West Robinson Street DPR - Division of Real Estate Orlando, Florida 32802 400 West Robinson Street Orlando, Florida 32802 Reynold Diaz 7908 N. Florida Avenue Tampa, Florida 33604
Findings Of Fact Respondent, George G. Walsh, is a licensed real estate broker in the State of Florida, holding license number 0117943. Mr. Walsh is the owner of and the qualifying broker for G. G. Jerry Walsh Real Estate, located in Panama city, Florida. In May 1989, Respondent was the acting broker for Howard Bilford of Miami, Florida. Mr. Bilford owned a five acre parcel of property located in Bay County, Florida. Around May 15, 1989, Tama and Paul Russ, through Mr. Walsh's office, entered into a contract for the purchase of Mr. Bilford's property. The purchase price of the property was $15,000. The Russ' gave Mr. Walsh a $500 binder for deposit in his escrow account. The $500 was placed in Respondent's escrow account. Simultaneous with the signing of the sales contract and deposit receipt agreement, Mr. Walsh also prepared an estimated closing cost statement. On that closing cost statement, Mr. Walsh estimated that a survey of the property would cost the Russ' $450. During this meeting, Mr. Walsh explained to the Russ' that, especially if a financial institution was involved in the financing of the property, there would be certain costs which they would probably have to pay up front. Part of those costs included a survey of the property. At about the same time, the Russ' made application for a loan to a credit union located in Panama City, Florida. At the time of the loan application, the loan officers Mrs. Stokes, prepared a closing cost statement estimating the loan closing costs which the Russ' would encounter. On the credit union's closing cost statement, the cost of a survey was estimated to be $150 to $200. Since it was the credit union that required the survey, the Russ' believed that that estimate was the more accurate. The Russ' simply could not afford a $500 survey. As part of the loan application, an appraisal of the property was required. The appraisal was ordered by the credit union on May 16, 1989, and was completed on May 31, 1989. Unfortunately, the property had been vandalized by unknown persons, and the mobile home which was on the property had suffered severe and substantial damage. The appraisal indicated that the real estate was worth $10,500. With such a low appraisal, the credit union would not lend the amount necessary to purchase the property at the negotiated price. In an effort to renegotiate the property's price, Tama Russ inspected the property and prepared a list of the items which would have to be repaired to make the mobile home liveable. At the same time, the Russ' placed no trespassing signs and pulled logs across the entry to the property. The Russ' also placed padlocks on the doors to the mobile home and removed the accumulated garbage inside the mobile home in an effort to secure the property. They made no other repairs to the property. On June 1, 1990, the Russ' told the loan officer to hold the loan application. At some point during this process, both Mr. Walsh and the Russ' became aware that the survey would cost a considerable amount more than had been expected. By using a favor with Mr. Walsingham of County Wide Surveying, Mr. Walsh obtained a survey price of $500 for the Russ'. In an effort to help the Russ' close on the property, Mr. Walsh contacted Mr. Bilford to see if he would agree to pay the $500 survey cost. Mr. Bilford so agreed, contingent on the closure of the transaction, and sent Mr. Walsh a check made out to County Wide Surveying in the amount of $500. At that point, the Russ' believed that they were no longer obligated to pay for the survey since Mr. Walsh told them that Mr. Bilford was to pay for the survey. On June 3, 1989, Mr. Bilford agreed to a renegotiated price of $10,500.00 on the property. Additionally the Russ' agreed to sign a ten year promissory note for $2,000 bearing 11% interest per annum. Since there were changes in the terms of the contract, the Russ' entered into a net contract with Mr. Bilford on June 3, 1989. The new contract expired on June 30, 1989. Around June 5, 1989, the Russ' learned that their credit had been preliminarily approved. However, such preliminary approval only indicated that the Russ' had sufficient income to proceed with the more costly loan underwriting requirements of the credit union. Such preliminary approval did not indicate that the loan would be finally approved by the financial institution. The preliminary approval was communicated to Mr. Walsh by Tama Russ. Ms. Russ intended the communication to mean that they had been preliminarily approved by the financial institution. Mr. Walsh in an abundance caution contacted Mrs. Stokes, the loan officer. Mrs. Stokes advised him that the Russ' credit had been preliminarily approved. She did not tell him that the loan had been finally approved. Through a misunderstanding of what Mrs. Stokes communicated to him, Mr. Walsh ordered the survey from County Wide Realty on June 7, 1989. There was no reliable evidence presented that the credit union had authorized him to order the survey. The credit union at no time during this process ordered the survey. Mr. Walsh testified that Ms. Russ told him to order the survey. Ms. Russ denies that she gave Mr. Walsh permission to order the survey. At best this evidence goes only to demonstrate Respondent's intent with regards to the actions he undertook in this case and removes this case from a Section 475.25(1)(b), Florida Statutes, violation. At some point Ms. Stokes left the employ of the credit union. On June 16, 1989, as part of her leaving, she unilaterally closed the Russ' loan application file and cancelled the loan application. Neither the Russ' nor Mr. Walsh were notified of the closure or the cancellation. The credit union's file fell into the void created between a change of employees. Because Mr. Walsh was unaware of Ms. Stokes' actions, Mr. Walsh, on July 13, 1989, after the expiration of the Russ' sales contract, contacted the credit union in order to obtain the loan closing package from the institution. The credit union had to hunt for the Russ' file. The credit union president called the Russ' about the loan and he was advised that they did not want the loan. The credit union's president then reviewed the loan file and noted that the Russ' had insufficient income to come up with the amount of the promissory note. He also thought the real estate constituted insufficient collateral for the loan. The loan application was officially denied on July 15, 1989. The Russ' were notified of the credit union's denial credit. The real estate transaction never closed. However, sometime after July 15, 1989, Mr. Walsh received the survey from County Wide. The survey indicates that the field work for the survey was completed on July 17, 1989, and that it was drawn on July 18, 1989. 1/ There was no reliable evidence which indicated any attempt had been made to cancel the survey. Sometime, after July 15, 1989, Tama Russ contacted Mr. Walsh in order to obtain the return of their $500 deposit. After many failed attempts to get the Russ' to voluntarily agree to pay for the cost of the survey, Mr. Walsh, around October, 1989, unilaterally paid the Russ' deposit to County Wide Realty. Mr. Walsh followed this course of action after speaking with some local FREC members who advised him that since FREC was swamped with deposit disputes that nothing would happen as long as he used his best judgment. The payment of the deposit to the surveyor, without prior authorization from the Ruse' violates Section 475.25(1)(d) and (k) Florida Statutes.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(d) and 475.25(1)(k), Florida Statutes, issuing a letter of reprimand to Respondent with instructions to immediately replace the Russ' trust deposit and forthwith submit the matter to the commission for an escrow disbursement order and levying a $250 fine. IT IS FURTHER RECOMMENDED that the portions of the Administrative Complaint alleging violation of Section 475.25(1)(b) be dismissed. DONE and ENTERED this 29th day of January, 1991, in Tallahassee, Florida. DIANE CLEAVINGER 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 29th day of January, 1991.
The Issue The issue in this case is whether Respondents are guilty of mishandling an escrow deposit.
Findings Of Fact Respondent Vu is and was at all material times a licensed real estate broker, holding Florida license number 0394778. He is and was at all material times the qualifying broker for Respondent American Homes and Investment Realty, Inc., which holds Florida license number 0250718. Respondent Vu owns Respondent American Homes. In 1990, Mr. and Mrs. Serge Delisfort contacted Respondents about purchasing a residence. The Delisforts eventually signed a contract to purchase a home and paid the $500 earnest money deposit to Respondents. Later learning that they would be liable to pay an annual homeowners' fee of $72, the Delisforts told Respondent Vu that they did not want to complete the purchase. The listing broker, which was not either Respondent, omitted mention of the homeowners' fee from the listing information supplied Respondents and the Delisforts. The sellers refused to release the deposit. Confronted with the dispute, Respondent Vu promptly requested an escrow disbursement order from the Florida Real Estate Commission on March 29, 1991. Due to the presence of a factual or legal dispute, the Florida Real Estate Commission informed Respondents, in a 47-word letter dated October 16, 1991, that it could not issue an escrow disbursement order. The October 16 letter warns Respondents to "immediately choose one of the other two alternatives available to you under ss. 475.25(1)(d), Florida Statutes, to settle this dispute, i.e., arbitration or a civil court." Instead, Respondents did nothing. The Delisforts periodically contacted Respondent Vu and asked if he could release their deposit. The sellers sold their house to another party and moved to Puerto Rico. The Delisforts contacted another broker and purchased a different house through the new broker. Eventually, the Delisforts contacted the Florida Real Estate Commission and asked its help in obtaining the deposit. An investigator for the Division of Real Estate interviewed Respondent Vu on March 1, 1994. Explaining the reason for the delay, Respondent Vu, possibly confused, stated that the buyers had left Orlando for awhile. In fact, the buyers had remained in Orlando. At the suggestion of the investigator, Respondent Vu contacted both parties, and they agreed to split the deposit equally. Respondent Vu prepared the paperwork, which the parties signed on March 11, 1994. At that time, Respondents paid each party $250. The Delisforts have since listed their home for sale by Respondents. While improperly holding the $500 deposit, Respondent Vu was preoccupied by the illnesses and deaths of his parents, who remained in Vietnam. Despite the possibility of trouble upon his return to Vietnam, Respondent Vu traveled to Vietnam at least once during this time to care for one or both of his parents. Respondents failed to implement timely the remedies established by law and identified by the Florida Real Estate Commission in its letter of October 26, 1991. Respondent Vu acted two and one-half years later, only after one of Petitioner's investigators contacted him. It is no excuse that the costs of arbitration or court would have consumed a large part of the amount in dispute. Confronted with that prospect, the sellers or the Delisforts would probably have settled the matter. If not, that would have been their problem, not Respondents'. The fact is that Respondents failed to discharge their obligations by presenting the dispute for resolution in a timely fashion. Nonetheless, the amount involved is modest. Neither party had a clear claim to the funds, nor was either party exceptionally troubled by Respondents' casual handling of the matter. The Delisforts contacted the Florida Real Estate Commission, but did not realize that they were in effect filing a complaint against Respondents, in whom they entrusted the sale of their current home. A final order issued July 18, 1988, involves Respondents' mishandling of a salesperson's commission. The husband of the salesperson owed Respondent Vu some money, and both men agreed that the debtor's wife would work off the debt by selling real estate at Respondent American Homes. However, the debtor's wife was of a different mind. After earning her first commission, she refused to allow Respondents to credit it against her husband's debt. When Respondent Vu ignored her demand for payment, she filed a complaint, which resulted in the final order and Respondents' proper payment of the commission.
Recommendation It is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order finding both Respondents guilty of violating Section 475.25((1)(d)1, reprimanding both Respondents, and requiring Respondent Vu to take a thirty-hour broker management course. ENTERED on February 22, 1995, in Tallahassee, Florida. ROBERT E. MEALE 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 on February 22, 1995. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Legal Section--Suite N-308 Hurston Bldg., North Tower 400 West Robinson Street Orlando, FL 32802-1772 Dau Viet Vu 1048 Pine Hills Rd. Orlando, FL 32808
The Issue The issue for consideration was whether Respondents violated specified subsections of Section 475.25 Florida Statutes with regard to alleged misuse of escrow funds.
Findings Of Fact At all times relevant hereto Respondent Mary L. Cluett was a licensed real estate broker in the State of Florida, having been issued license number 0197523 in accordance with Chapter 475, Florida Statutes. The last license issued to Mary L. Cluett was as a broker, c/o Cluett Realty, Inc., 4720 Palm Beach Boulevard, Fort Myers, Florida 33905. (pre-hearing stipulation, Paragraph 2). Respondent Cluett Realty, Inc. is now, and was at all times relevant, licensed as a real estate broker in the state of Florida, having been issued license number 0021798 in accordance with Chapter 475, Florida Statutes. The last license issued to Cluett Realty, Inc. was at the address of 4720 Palm Beach Boulevard, Ft. Myers, Florida 33905. (pre-hearing stipulation, paragraph 2). The qualifying broker for Cluett Realty, Inc. is Ernest H. Cluett, husband of Mary L. Cluett. Mary Cluett is the vice-president of the corporation. On October 17, 1984, Charles and Pamela Darr signed a multiple listing agreement with Cluett Realty, Inc. to sell their home at 598 New York Drive, Ft. Myers. (Petitioner's Exhibit #2). On February 4 and 5, 1985, the Darrs and Irving and Beverly Lockner signed a contract for sale and purchase of the New York Drive house. The terms provided for purchase price of $44,000.00; a $500.00 deposit in the form of a promissory note to be redeemed by February 26, 1985; the assumption of an existing mortgage; a second mortgage in the amount of $3,000.00 and a balance to close in the amount of $2500.00. The closing date was set for "March 14, 1985, or as soon as possible". (Petitioner's Exhibit #5). The Darrs and Lockners were told on March 14, 1985 that the paperwork was not ready for closing. The Darrs had already moved out of the house and into a leased apartment and the Lockners had travelled from their home in Baltimore with furnishings to move in. Reluctantly, Pamela Darr agreed to let the Lockners move in that day and pay rent for the rest of the month. It was understood by Ms. Darr that the closing would be on April 1st. (tr. 27,28,29) On March 14, 1985, Mrs. Lockner gave Cluett Realty $1500.00. The receipt signed by Helen Weise, an employee of Cluett Realty, is marked "escrow deposit on property, 398 New York Avenue". (Petitioner's Exhibit #1). On March 22, 1985, Beverly Lockner gave Cluett Realty $500.00; the receipt signed by Mary L. Cluett is marked "Escrow, Darr/Lockner". (Petitioner's Exhibit #3) On April 15, 1985, the Lockners gave Mary Cluett another $500.00 in the form of two checks: one for $362.64 from MSC, Inc. to Irving Lockner ( a paycheck), and a personal check to Cluett Realty from Beverly Lockner in the amount of $137.36 (tr. 17,18, Petitioner's Exhibit #4, Beverly Lockner testimony p. 17) The $2500.00 was placed in the Cluett Realty, Inc. escrow account. (tr-19) The Lockner/Darr transaction closed on June 10, 1985, (Prehearing Stipulation, Paragraph 2) In the meantime, on March 26, 1985 and April 25, 1985 Mary Cluett paid the Darr's mortgage payments for April and May with checks drawn on the Cluett Realty, Inc. escrow account in the amount of $425.38 each, payable to United Mortgage Company. (Prehearing Stipulation, paragraph 2) Beverly Lockner did not give Mary Cluett permission to use the escrow money for the Darr's mortgage. She did not know the money was being taken out until she found Mary Cluett's handwritten note left on her door which indicated that closing would be on May 6, 1985 and showed that two payments totalling $850.76 had been deducted from the $2500.00 escrow account. She called Ms. Cluett and had a confrontation about the deductions. Beverly Lockner intended that the $2500.00 be used for the closing balance. When the transaction finally closed on June 10, she had insufficient funds to close so she gave Cluett Realty a third mortgage and borrowed $500.00 from Pamela Darr. (Beverly Lockner testimony, pp. 6,7,9,16 23-26) The Darrs did not give Mary Cluett permission to use the escrow money to pay the mortgage, although Ms. Darr was concerned that the mortgage be paid. On March 14th, Pamela Darr was aware that the April mortgage payment would be taken out of the escrow account when she picked up a form, alleged signed by the Lockners, with a notation at the bottom about the payment. Pamela Darr went to Mary Cluett's office at 5:30 on that day to pick up the form. (tr. 25, 118, 119, 122, Respondent's Exhibit #1) The form in question provides as follows: [Cluett Realty, Inc. letterhead] March 14, 1985 To Whom It May Concern: We Irving N. and Beverly T. Lockner buyers, of property situated 598 New York Dr., Ft. Myers, Fl. inspected the above property on March 14, 1985 (date) and have found the property to be to our satisfaction and accept property "as is" and taking possession as Owners today. Sellers are not responsible for any maintenance on the house of any kind. (SIGNED) [Beverly Lockner Signature] (Buyer) [Irving Lockner Signature] (Buyer) WITNESS: [Mary Cluett Signature] DATE: [dated 3-14-85] NOTE: OUT OF THE ONE THOUSAND FIVE HUNDRED ($1,500,00) DOLLARS deposited with CLUETT REALTY ESCROW ACCOUNT THE FIRST MONTH'S PAYMENT OF $425.38 shall be made. (Respondent's Exhibit #1) The testimony of Mary Cluett and that of her employee, Helen Weise, differ substantially from Beverly Lockner's testimony regarding Respondent's Exhibit #1. Mary Cluett claims that the form was completed and signed by the Lockners in her office on March 14, 1985, and that after a phone call from Pamela Darr the note at the bottom was added before the Lockners signed. (tr- 68) She claims that by agreeing to the notation, the Lockners's clearly knew about the intended use of the escrow money for the mortgage. Beverly Lockner distinctly remembers the form. She claims that when Mary Cluett came to the house on New York Drive on March 14th, she took the blank form from her case and told the Lockners they needed to sign it that day in order to take over the house. Mrs. Lockner signed her husband's name as he had gone out to the yard. The blanks on the form were not typed in, nor was the note on the bottom. This was one of several blank forms in Mrs. Cluett's case. (testimony of Beverly Lockner, p. 6, 11-13) Helen Weise claims she typed the entire form, all but the letterhead, in the office while the Lockners were there. (tr-88) This testimony is inconsistent with the appearance of the exhibit. Mary Cluett's testimony about this form and about the purpose of the escrow money from Beverly Lockner is not plausible. For example, she claims that when the Lockners came in with the $1500.00 on March 14th the purpose was to pay the note for $500.00 referenced on the Contract for Purchase and Sale and to provide money for the mortgage payments. However, on the 14th of March, while no one knew for certain when the closing would be, it was anticipated that it would take place on April 1st. In that case only one mortgage payment would have been necessary. The amounts and timing of Mrs. Lockner's payments into the escrow account are consistent with her testimony that she was putting aside the funds necessary for closing. Assuming, for argument's sake that Mrs. Lockner did know about and approve the first payment, there is no evidence that she knew about or acceded to the second payment prior to its deduction from the escrow account. Respondent's Exhibits #2, 3, and 4 are dated May 28, 1985, May 6, 1985, and May 11, 1985, respectively. Each are notations on Cluett Realty, Inc. stationery showing the April and May deductions from the escrow account, the account number of the mortgage to be assumed, the balance required for closing and other information related to closing. Mary Cluett testified that these were delivered to Mrs. Lockner's house and copies were sent to the Darrs at the New York Avenue address as she did not know the Darr's apartment address. Pamela Darr denies receiving any of these notices. Beverly Lockner said she received only the one dated May 6th. (testimony of Beverly Lockner, P. 9) Ernest Cluett testified that the notice dated May 6, 1985 was delivered on that same date.(tr- 101) By then the second payment from the escrow account had already been made. From the testimony and evidence it is apparent that considerable confusion existed regarding the Darr/Lockner transaction. Both buyer and seller thought the deal would close on March 14th. They learned that day that it would not close and hasty arrangements were made for the Lockners to occupy the house since they had moved their belongings from Baltimore. No firm financial arrangements were made, other than an oral agreement for the Lockners to pay a pro-rated rent for the remainder of March. The closing did not take place on April 1st or the several subsequent dates that it was set, until June 10th. Meanwhile, the mortgage payments were due and no arrangements had been made for their payment. Mary Cluett prepared the March 14th form to satisfy Pamela Darr that the payments would be made, but neglected to clear the arrangement with Beverly Lockner. Mrs. Lockner figured the payments were not her responsibility because the house was not hers; the failure to close as scheduled on March 14th was not her fault. She blamed Mary Cluett for not notifying the parties sooner since she would not have left Baltimore. (testimony of Beverly Lockner, pp. 18-22)
The Issue The issues in the case are whether the allegations of the Administrative Complaint are correct, and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, Respondent Clifford Altemare (Mr. Altemare) was a licensed real estate broker, holding Florida license BK-3062479. At all times material to this case, Respondent Altema Consulting Co., LLC (ACC), was a licensed real estate brokerage, holding Florida license CQ-1024239. Clifford Altemare was the owner, qualifying broker, and officer for ACC. On August 21, 2006, Mr. Altemare signed an agreement to represent for sale hotel property owned by Sweet Hospitality, LLC. The agreement stated that Mr. Altemare would receive an unidentified commission based on the sales price. On December 12, 2006, Mr. Altemare received an escrow deposit of $25,000 from Rakesh Rathee, who signed an agreement to purchase the hotel. The $25,000 deposit was transferred by wire from Rakesh Rathee into a corporate operating account of ACC. Mr. Altemare failed to place the $25,000 escrow deposit into an ACC escrow account. Apparently, because the seller decided not to sell the property, the proposed sale did not close, and the buyer demanded the return of the $25,000 deposit. There is no credible evidence that the seller has made any claim upon the deposit. Mr. Altemare has refused to return the $25,000 deposit to Rakesh Rathee. At the hearing, Mr. Altemare asserted that the deposit has not been returned to the buyer because of uncertainty as to whom the deposit should be refunded. There was no credible evidence offered at the hearing to support the assertion that someone other than Rakesh Rathee should received a refund of the $25,000 deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order, stating that the Respondents violated Subsections 475.25(1)(b), (d), and (e), Florida Statutes (2006), and Florida Administrative Code Rule 61J2-14.010 and imposing a $15,000 administrative fine and a five-year suspension of licensure. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2010. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801 Clifford Altemare Altema Consulting Co., LLC 1047 Iroquois Street Clearwater, Florida 33755 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801
Findings Of Fact Respondent Shaughnessy is a licensed real estate broker in Florida, holding license number 0079279 at all material times. He has been a real estate broker for 18 years. Respondents Conifer Consulting Group, Inc. and Conifer Realty Group, Inc. are corporations registered as real estate brokers, holding license numbers 0271201 and 0271202, respectively. In January 1992, Mr. Shaughnessy answered a want ad seeking a sales manager for single-family and condominium sales for Respondent Conifer Consulting Group, Inc. Mr. Shaughnessy received an interview with Scott Spence, the minority owner of both Conifer corporations. Following a successful interview, Mr. Shaughnessy interviewed with Bruce Houran, the majority owner of the Conifer corporations. Mr. Spence was the marketing director of the Conifer corporations. A civil engineer, Mr. Houran had provided the money for the businesses and relied on Mr. Spence's expertise in a wide variety of business matters, including the real estate operations. Following a successful interview with Mr. Houran, Mr. Shaughnessy had a final interview with Mr. Spence and Mr. Houran. At the conclusion of the third interview, the three men agreed that Mr. Shaughnessy would join the Conifer corporations as a sales manager, devoting his efforts to managing the sole salesperson working for the Conifer corporations at Bocilla Island Club in Bokeelia. In return for his efforts, the Conifer corporations agreed to pay Mr. Shaughnessy the sum of $350 weekly plus certain expenses. During the course of the interviews, Mr. Shaughnessy mentioned that he was a licensed real estate broker. The Conifer corporations were employing Ms. McClaran as their registered broker, but she had in reality only lent her license to the Conifer corporations in return for a portion of the sales and rental commissions. Following the interviews, and outside the presence of Mr. Shaughnessy, Mr. Houran expressed interest to Mr. Spence in replacing Ms. McClaran with Mr. Shaughnessy. Pursuant to this plan, Mr. Houran sent a letter to Ms. McClaran, with a copy to Mr. Spence but not Mr. Shaughnessy, terminating her employment with the Conifer corporations. The letter states that they have hired Mr. Shaughnessy as a "sales manager with a Broker's license" and adds that he will be providing his license to the Conifer corporations. Pursuant to the employment contract with Ms. McClaran, the letter gives her 90 days' notice, and she continued to earn commissions on sales contracts executed during that time. Unfortunately, no one told Mr. Shaughnessy that he was the new broker for the Conifer groups. Ms. McClaran's name continued to appear on the door to the real estate offices, even after the 90 days had expired. The Conifer corporations never had business cards printed up showing Mr. Shaughnessy as the broker, nor did Mr. Shaughnessy or anyone else hold Mr. Shaughnessy out as the broker for the companies. In late October 1992, the Conifer real estate salesperson contacted the Florida Real Estate Commission to inquire as to the status of her pending application to become a broker. She learned that the Conifer corporations were no longer properly licensed, as their license had expired in March 1992. The salesperson contacted Mr. Houran and told him about what she had learned. Mr. Houran called Mr. Shaughnessy and informed him of the licensing situation. Mr. Shaughnessy immediately began the process of placing his broker's license with Conifer Realty Group, Inc. (Mr. Houran decided not to continue to involve Conifer Consulting Group, Inc. in real estate activities.) Mr. Houran appointed Mr. Shaughnessy as an officer of Conifer Realty Group, Inc. on October 23, 1994. On November 4, 1992, Mr. Shaughnessy filed with Petitioner a Request for Change of Status to effect the necessary change. Only when Mr. Shaughnessy filed the paperwork with Petitioner did his rate of compensation change. His old pay rate of $350 weekly was replaced by a new arrangement in which he received an equity interest in future developments created by either Conifer corporation. In late October or early November 1992, Mr. Shaughnessy also began the process of creating an escrow account for Conifer Realty Group, Inc. Previously, all escrow monies had been deposited in the general operating account of the corporation. No one performed monthly reconciliations of escrow monies, although no monies were ever lost. Working as quickly as possible to transfer sales and rental escrow monies into the new account, Mr. Shaughnessy received the first bank statement for the account around December 6, 1992, performed the required reconciliation, and determined that the escrow account was in good order and balanced. By the time of an inspection from one of Petitioner's investigators on December 4, 1992, there was no sign on the door of the real estate office at Bocilla Island Club. However, at that time, neither Conifer corporation had any relationship with the developer of the units, nor was either Conifer corporation conducting business of any sort out of this office. The salesperson who had discovered the problem had resigned, had formed a new company, had assumed Conifer's responsibilities for sales and rentals, and was using the old office at the Bocilla Island Club. Until the time of the filing with Petitioner in November, Mr. Shaughnessy was never aware, nor could he have reasonably been aware, that his broker's license was to be used to qualify the Conifer corporations. Communications had broken down between Mr. Houran and Mr. Spence or Mr. Spence and Mr. Shaughnessy. In any event, Mr. Shaughnessy never agreed to place his license with either Conifer corporation until October 1992. At all material times during which Mr. Shaughnessy's broker's license was placed with the Conifer corporations, the escrow account was maintained and properly reconciled. There is no evidence that the signage was improper at anytime, except possibly in connection with the real estate office operated by the former salesperson. However, the Conifer corporations are liable for the substantial period of time during which they operated without an escrow account. Although no money was lost or unaccounted for, management's casual attitude toward serious legal responsibilities is manifest in the sloppy way that the Conifer companies handled the transition between brokers and the improper relationship that they earlier maintained with Ms. McClaran. As a result of her involvement in the matter, Ms. McClaran, who was an inexperienced broker and personal friend of Mr. Spence, had her broker's license suspended for 90 days. It is a matter of some mitigation that Mr. Spence is no longer involved with either Conifer corporation and that Mr. Houran reasonably expected that his noninvesting co-owner would provide something of value to the companies--namely, his expertise in real estate matters, including licensing. The absence of injury to the public, although irrelevant to the issue of liability, is another factor in mitigation, as is the quick action taken by the corporations, through Mr. Shaughnessy and at Mr. Houran's direction, to correct the situation as soon as it was brought to their attention.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against William P. Shaughnessy; finding Conifer Realty Group, Inc. and Conifer Consulting Group, Inc. guilty of failing to maintain an escrow account and operating as a broker without holding a valid and current license as a broker; imposing an administrative fine of $4000 against the Conifer companies, jointly and severally; and issuing a reprimand against both companies. ENTERED on April 20, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on April 20, 1994. APPENDIX Rulings on Petitioner's Proposed Findings 1-8: adopted or adopted in substance. 9: rejected as unsupported by the appropriate weight of the evidence. 10-12: adopted or adopted in substance. 13: rejected as unsupported by the appropriate weight of the evidence and subordinate except for fact that there was no escrow account, which is adopted. 14-15: adopted or adopted in substance. 16: to the extent of implication that the office was that of a Respondent, rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings 1-8 and 10: adopted or adopted in substance. 9: the state of mind of Respondents, as well as their degree of culpability, has been addressed in the recommended order. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Steven W. Johnson BPR, Division of Real Estate 400 West Robinson Street N308 Orlando, Florida 32802 Leonard P. Reina Forsyth, Brugger 600 Fifth Avenue, South #210 Naples, Florida 33940
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.
