Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, F.S., Chapters 120, 455, and 475, F.S., and the rules promulgated pursuant thereto. Respondent Charles B. Harvey, Jr. is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0474466 in accordance with Chapter 475, F.S. The last license issued was as a broker t/a Commercial & Investment Realty, 1116D Thomasville Road, P. O. Box 785, Tallahassee, Florida 32317. On or about April 17, 1992, Petitioner's Investigator Juanita Waller conducted a routine office/inspection audit of Respondent at 1116D Thomasville Road, Tallahassee, Florida and discovered that Respondent's trust account #077780-00242743 had an approximate shortage of $3,343.07, calculated as $29,205.00 in total trust liability but only $25,861.93 as reconciled bank balance. Thereafter, the Respondent wrote Investigator Waller and provided evidence that a portion of the missing funds was caused by an $875 "bad check" which had been deposited into his escrow account. Additionally, Investigator Waller found that Respondent failed to properly reconcile his escrow account by comparing the total trust liability with the reconciled bank balance of the trust account, as required by the rules of the Commission. Rather, he had been balancing his checkbook only. Respondent has been completely cooperative with Petitioner agency and upon notification of his errors and omissions immediately began the process of correcting the procedures used in reconciling his escrow account in accord with the requirements of the agency. He also immediately made restitution from his own monies to his escrow account as soon as he was made aware what had happened. It is noted that reconciliation of monthly written statements were not required by the agency until shortly before Respondent was investigated, however he had a duty to apprise himself of all statutes and rules and to govern himself accordingly. Likewise, he accepted "full responsibility" for allowing funds from individual clients' accounts to be used to pay for expenses incurred by other clients' properties, and has taken steps to prevent such occurrences in the future. No loss has been incurred by any party. Respondent has made good any payments owed.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That a Final Order be issued and filed by the Florida Real Estate Commission finding the Respondents not guilty of breach of trust but guilty of culpable negligence as charged in Count I of the Administrative Complaint, guilty of having failed to maintain trust funds in escrow as charged in Count II of the Administrative Complaint, and guilty of having failed to properly reconcile his escrow account as charged in County III of the Administrative Complaint and further ordering that all the Respondent's licenses, registrations, certificates and permits be reprimanded and placed on probation for a period of one year and Respondent be required to pay an administrative fine of $300 (total) within sixty (60) days of the entry of the Final Order and that before the end of the probationary period he successfully complete and provide satisfactory evidence to the Florida Real Estate Commission of having successfully completed the thirty (30) hour Brokerage Management course, these education hours to be in addition to any other professional education required by the Respondent by the licensing provisions of this state, and further providing that if all these requirements not be successfully fulfilled as required by the Final Order, then all the Respondent's licenses, registrations, certificates and permits shall be suspended until all such requirements are completed but in no event shall such suspension exceed ten (10) years. RECOMMENDED this 12th day of January, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS 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 12th day of January, 1993. APPENDIX TO RECOMMENDED ORDER 92-6154 DOAH CASE NO. 92-6154 The following constitute specific rulings, pursuant to S120.59 (2), F.S., upon the parties' respective proposed findings of fact (PFOF) Petitioner's PFOF: 1-5 Accepted. 6 Accepted as modified. Respondent's filed no PFOF: COPIES FURNISHED: Charles B. Harvey, Esquire 1018-104 Thomasville Road Tallahassee, FL 32303 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, FL 32802 Jack McRay General Counsel 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900
Findings Of Fact The Department rules on the Proposed Findings of Facts and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Findings numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, and 29 are accepted to the extent that they are not inconsistent with the Findings of Fact rendered by the Hearing Officer. Applicant's Proposed Finding number 22 is accepted to the extent that factual matters are discussed. However, to the extent that it suggests that "public convenience and advantage" will be promoted by establishment of the trust company, the Department rejects this conclusionary statement as inconsistent with the Department's conclusion as to this criterion based on the reasons as discussed in paragraph three (3) contained in the Conclusions of Law of the Final Order. Applicant's Proposed Finding number 25 concerning the telephone survey has been dealt with in the Hearing Officer's Finding number 13, as adopted by the Department. Applicant's Proposed Finding number 26 concerns several counter- arguments addressing contentions proposed by the Protestants. As to (1) "Concentration", (2) "Dual Banking", and (3) "Siphoning of Capital". To the extent that no significant findings of fact, if any, were premised on these contentions, there is no necessity to respond. A portion of the Hearing Officer's Finding of Fact number 10, was excepted to, concerning the "concentration" argument, and will be treated below in paragraph 9. Number 4 concerning injury to existing institutions has been dealt with in the Final Order in paragraph 4 of the Conclusions of Law, as to the "reasonable promise". The Applicant's Conclusions of Law numbers 1, 4, 5, 6, 7 are accepted. Numbers 2, 3, and 8 are rejected as contrary to the Conclusions of the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS Protestant's Proposed Findings numbers 1, 2, 3, 4, 5, 13, 18, 19, 20, 21, 23, 29, 30, 34, and 35 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings or with the Final Order. Protestant's Proposed Findings numbers 6, 7, 8, 9, 10, 12, 14, 15, 16, 17, 22, 24, 25, 26, 27, 28, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings or with this Final Order, or are otherwise irrelevant or immaterial. APPLICANT'S EXCEPTIONS The Applicant's Exceptions numbers 1, 2, 3, 4, 5, 6, and 10 concern Proposed Findings that were not specifically referenced in the Hearing Officer's Report. However, they are generally consistent with the Hearing Officer's Findings and have been accepted by the Department to the extent that they are consistent with the Final Order. Exception 7, concerning Proposed Finding number 18, has been discussed above in paragraph 1. Exception 8, concerning Proposed Finding number 22, has been discussed above in paragraph 2. Exception number 9, concerning objection to portions of Finding of Fact number 10, is rejected. The first sentence of the Finding may speak in terms of "national trust business", but is viewed in terms of trust business throughout the nation. In no wise does it imply that there is a national market for personal trust business. The language should be viewed in the context of the overall finding. Exception number 10 is duly noted and reflected in the Final Order. Exception number 11 has been addressed in the Final Order in paragraph 4 of the Conclusions of Law as to "resonable promise." CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance and that a true and correct copy of the foregoing was sent by Certified U.S. Mail, Return Receipt Requested, to: Thomas J. Cardwell, Esquire, Post Office Box 231, Orlando, Florida 32802; Robert A. White, Esquire, Aubrey Kendall, Esquire, and Paul Brenner, Esquire of the firm Mershon, Sawyer, Johnston, Dunwoody and Cole, 1600 Southeast First National Bank Building, Miami, Florida 33131; Howard A. Setlin, Esquire, 1111 Lincoln Road Mall, Suite 600, Miami Beach, Florida 33139; Bruce Culpepper, Esquire, 350 East College Avenue, Tallahassee, Florida 32301; Robert Asti, Esquire, 2400 First Federal Building, Miami, Florida 33131; Richard R. Paige, Esquire, Alfred I. DuPont Building, Miami, Florida 33131; Charles Cane, Esquire, 801 Hallandale Beach Boulevard, Hallandale, Florida 33009; and G. Kenneth Kemper, Esquire, 9999 N.E. 2nd Avenue, Suite 200, Miami Shores, Florida 33138, on this 24 day of January, 1980. FRANKLYN J. WOLLETT Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 (904) 488-9886
The Issue Whether Petitioner is qualified for licensure as a real estate salesperson.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: Petitioner is fifty-two years of age. He became licensed as a real estate salesperson in the State of Florida in 1981, after returning to the state (where he was born and raised) from New Jersey. The following year he obtained a license that allowed him to operate as a real estate broker in Florida. In or about 1984, Petitioner formed Landmark Realty, Inc. (Landmark), which operated in Broward County, Florida, as a Century 21 franchise. On or about June 29, 1989, in DPR Case Nos. 0163964 and 0164128, the Department of Professional Regulation, Division of Real Estate, issued an Administrative Complaint against Petitioner and Landmark containing the following allegations: Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0344112 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker c/o Landmark Realty, Inc., 1860 N. Pine Island Road, Plantation, Florida 33322. Respondent Landmark Realty, Inc., is now and was at all times material hereto a corporation licensed as a real estate broker in the State of Florida having been issued license number 0239155 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 1860 N. Pine Island Road, Plantation, Florida 33322. COUNT I The Department of Professional Regulation conducted a routine office inspection/escrow account audit of Respondents' escrow accounts between June 15, 1989 and June 16, 1989. Respondents' escrow account number 55322000377 is held at First Union National Bank of Florida. Respondents' escrow account number 55322000377 had a balance of $1,368.36 on June 16, 1989. The pending sales files revealed that the escrow monies balance should have been $65,250 on June 16, 1989. The escrow account had a shortage of $63,881.64. . . . Respondent Caprio claims he transferred $80,700 from Respondents' escrow account number 55322000377 to the Keys & Keys trust account number 0304301543 on the advice of counsel. . . . Kathy Clements, Operations Officer for County National Bank of South Florida furnished a written letter that the Keys & Keys trust account number 0304301543, had a current balance of $101,901.43 on June 20, 1989. . . . The Respondents failed to furnish any validated documents detailing the dates and amounts of deposits into the aforementioned Keys & Keys trust account from the aforementioned Respondents' escrow account. The Respondents' escrow account number 55322000377 is a commercial money market investment account with the interest going to Landmark Realty, Inc., without the consent or prior knowledge of all parties. . . . The Respondents failed to timely notify the Florida Real Estate Commission of conflicting demands on the earnest money deposit on the contract, dated July 17, 1988, between David B. Perry, as seller, and Earle A. and Yvonne M. Levy, as buyers. The buyers entrusted an earnest money deposit of $1,000 with the Respondents on or about July 17, 1988, and an additional earnest money deposit of $20,000 was entrusted to the Respondents on or about August 22, 1988. The Respondents received a demand letter f[rom] the buyers on December 13, 1988 and a demand letter from the seller's attorney on February 21, 1989. . . . On or about April 19, 1989, the Respondents received or should have received a total earnest money deposit of $4,000 from Perry Silver, as buyer, and Charles Hennessey, as seller. The audit revealed no proof that the additional deposit of $2,000 as required by the contract dated April 19, 1989 was received by the Respondents. . . . The Respondents failed to timely notify the Florida Real Estate Commission of conflicting demands on the earnest money deposit on the contract, dated May 31, 1989, between C. McCanes and J. Steele, as sellers, and Jacqueline W. Mayers, as buyer. The buyer entrusted an earnest money deposit of $1,000 with the Respondents on or about May 31, 1989. The additional deposit of $4,000 as called for in the contract was never received by the Respondents. On June 1, 1989, the buyers made a demand on the earnest money deposit and on June 6, 1989 the seller made a demand for the earnest money deposit. . . . The Respondents, on or about May 16, 1989, did unlawfully disburse check number 0963 from the Respondents' escrow account number 55322000377 to the Respondents' operating account to cover office expenses. The Administrative Complaint further alleged that, "[b]ased upon the foregoing," Petitioner and Landmark were guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes"; "having failed to account and deliver a deposit in violation of Subsection 475.25(1)(d), Florida Statutes"; "having failed to maintain trust funds in [their] real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Subsection 475.25(1)(k), Florida Statutes"; and "having failed to notify the Florida Real Estate Commission upon receiving conflicting demands or having a good faith doubt as to who is entitled to an earnest money deposit according to Rule 21V-10.032, Florida Administrative Code and therefore in violation of Subsection 475.25(1)(e), Florida Statutes." Petitioner had never before had a complaint filed against him. On December 21, 1989, the Florida Real Estate Commission issued a Final Order in DPR Case Nos. 0163964 and 0164128 finding Petitioner guilty of the violations alleged in the Administrative Complaint and revoking his license, notwithstanding his unblemished disciplinary record. The Final Order read, in pertinent part, as follows: On December 5, 1989, the Florida Real Estate Commission heard this case to issue a Final Order. On or about June 29, 1989, an Administrative Complaint was filed against Respondents. The Respondents admitted the allegations of fact. . . . The Respondents were properly served with the Notice of Hearing, appeared and presented matters in mitigation. Based upon the allegations of fact and upon the information provided to the Commission at its meeting of December 5, 1989, the Commission finds the Respondents guilty of violating s.475.25(1)(b), 475.25(1)(d), 475.25(1)(e), and 475(1)(k), Florida Statutes, and Rule 21V-10.032, Florida Administrative Code, as charged in the Administrative Complaint. Therefore, the Commission ORDERS that the license of Respondent Philip Caprio be revoked. The Commission further ORDERS that Respondent Landmark Realty Inc. be reprimanded and that said Respondent pay an administrative fine of $1000.00 within 30 days of the date of this Order. Petitioner did not appeal the Final Order. Following the issuance of the Final Order, reimbursement was made to the victims of the violations of which Petitioner and Landmark had been found guilty. The loss of Petitioner's real estate license has adversely affected his ability to make a living and support his family. Petitioner is married to Teresa Caprio. He and Teresa have a twenty-five year old disabled daughter, who requires assistance in performing the normal activities of daily living. Before the revocation of Petitioner's license, the Caprios' daughter lived at home with them. Teresa was able to stay at home and care full-time for her daughter. After Petitioner's license was revoked, however, she no longer was able to do so, inasmuch as she needed to work outside the home to supplement the family income. The Caprios therefore had to place their daughter in a group home. Although Petitioner has not been able to earn nearly as much as he did when he had his real estate license, he has been gainfully employed since the revocation of his license. From 1989 to 1995, he worked for Potamkin Toyota (Potamkin), an automobile dealership. He started as a salesman at Potamkin. After approximately six months at the dealership, he was promoted to customer relations manager/weekend sales manager. He left the employ of Potamkin in 1995, following a change in management at the dealership. Petitioner is now, and has been since July of 1995, employed by Central Florida Investments, Inc., d/b/a Westgate Miami Beach (Westgate), a seller of timeshare plans. He currently is a salaried employee occupying the position of finance manager, a position to which he was promoted after his first six months with the company. He will be unable to advance further in the company if he does not obtain a Florida real estate license. In his position as finance manager, Petitioner takes deposits made by purchasers and prospective purchasers2 and delivers them to Westgate's contract office, which is approximately 20 feet from his office. Using hidden security cameras, Westgate management closely monitors the workplace activities of Petitioner and his coworkers. Petitioner has performed his job duties in a manner that has impressed Westgate management. He has proven to be a competent, reliable, responsible, honest, and trustworthy employee.3 Petitioner is involved in community activities. He and his wife volunteer their time to operate the Rainbow Foundation, a non-profit organization that they formed two years ago to promote the growth of residential facilities for the developmentally disabled in the South Florida area. It appears that since the revocation of his real estate license, Petitioner has rehabilitated himself and that therefore it is not likely that his relicensure would endanger the public.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission issue a final order finding that Petitioner is qualified to practice as a real estate salesperson. DONE AND ENTERED this 26th day of September, 1997, 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 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1997.
Findings Of Fact Petitioner is a state governmental licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, F.S., Chapters 120.455 and 475, F.S., and the rules promulgated pursuant thereto. Respondent is now and at all times material hereto was a licensed real estate salesman in the State of Florida having been issued License No. 0418629, in accordance with Chapter 475, F.S. The last license issued was as a salesman with a home address of 594 Andrews Street, Ormond Beach, Florida, 32075. From April 8, 1987, until September 11, 1987 he was on inactive status. From September 11, 1987 until at least November, 1987, he was on active status. His license expired March 31, 1988 and has not been renewed. Respondent and the owners (Goldsmiths) of certain property at 49 Sea Island Drive, North Ormond Beach, Florida, entered into an equity sharing agreement on October 1, 1986. Thereafter, Respondent was half owner of the property, and acted as agent for himself and the Goldsmiths for management and rental of the property. Sometime in early 1987, Respondent's former wife contacted Richard M. Dow of Watson Realty Corporation concerning Watson Realty Corporation's assuming management and rental authority over the property. Mr. Dow gave Respondent's wife a packet of information which included several types of material, including but not limited to, a blank standard lease form which had been stamped at the top with the name WATSON REALTY CORPORATION 425 S. YONGE STREET [U.S. 1] ORMOND BEACH, Florida 32074 The name "Watson Realty" was also printed in the body of the lease as agent for the premises, which, like all other crucial information was left blank. No agreement was ever reached by which Watson Realty Corp. or Mr. Dow were to take over management of the premises. On or about April 1, 1987, while still on active license status, the Respondent negotiated a six month lease of the premises at 49 Sea Island Drive, North Ormond Beach, Florida, with Sidney and Edythe Hirsch. By filling out the blank lease form obtained from Watson Realty Corp., Respondent entered into the six-month lease on behalf of himself and the Goldsmiths. He filled out the blank spaces with his name as lessor and the Hirsches as lessees, and crossed out the "Watson Realty Corp." in the body of the lease, substituting his own name therefor. He failed to cross out the stamped Watson Realty Corp. name and address at the top of the page. At the time of the signing of the lease, Respondent advised Mr. Hirsch that he was a licensed real estate agent because he had been taught he must make such disclosures in personal dealings so as not to take advantage of laymen. At formal hearing, he denied ever representing himself as an agent of Watson Realty Corp. or of Mr. Dow. Mr. Hirsch likewise testified that no such representation was made, only that Respondent said something like, "I work with them." Both Respondent and Mr. Hirsch concur that Respondent represented himself as the owner of the property in question without mentioning the Goldsmiths' interest. Hirsch knew and agreed to the scratching through of the Watson corporate name in the body of the contract, and to the substitution of Respondent's name therefor, but no one thought to cross through the stamped Watson name and address at the top of the page. In connection with the lease, Mr. Hirsch gave to the Respondent a $600 security deposit. Respondent shared the rent proceeds with the Goldsmiths even though he did not include their names on the lease or specifically advise the Hirsches of the Goldsmiths' interest in the property. Although the better course of action would have been for Respondent to make a fuller disclosure and to accurately make out the lease agreement with regard to the Goldsmiths' interest, no fraud or intent to defraud either the Goldsmiths or the Hirsches was demonstrated in Respondent's omissions in this regard. At no time alleged herein was Respondent registered as a real estate salesman in the employ of Watson Realty Corp. and at no time was the Respondent employed by Watson Realty Corp. in any capacity. Upon the termination of the lease period, the Hirsches vacated the house and made demands upon the Respondent for the return of their $600 security deposit. The Respondent refused to return the deposit because of substantial damage to the property in three rooms of the house. Hirsches' attorney and Respondent met to attempt to resolve the issue and then had a trial date set. Respondent appeared on the originally scheduled trial date but the case was continued. Respondent separated from his wife and moved to a different address without maintaining contact with the Hirsches' attorney, the court, the Department of Professional Regulation, or the Florida Real Estate Commission (FREC). Over a period of time, he lived at several addresses and eventually moved out of state. Although he was still living in the State of Florida at the time, he did not appear for trial on the security deposit demand, and on January 14, 1988, the Hirsches obtained a civil judgment against Respondent for payment of the $600 security deposit. Respondent had not satisfied the judgment as of the date of the filing of the Administrative Complaint herein and did not do so up through the date of formal hearing. Although Respondent expended a great deal of effort at formal hearing attempting to establish that he never received actual notice of the trial date for the $600 civil damages suit due to his frequent change of addresses during the course of his divorce, that is immaterial because the law presumes notice once suit is filed and properly served as apparently occurred in that case. Unless set aside, the judgment against Respondent was final and Respondent owed Hirsch the money due under it. However, under the circumstances, it is found that Respondent did not fail to pay Hirsch on the judgment through any intent to defraud, but merely through a misunderstanding as to the effect of the judgment. Mr. Hirsch eventually sought and obtained reimbursement of the $600 judgment amount from the FREC client security fund. The fund paid after significant unsuccessful attempts had been made to find Respondent. Respondent also maintained that he did not know about the reimbursement proceedings instituted by FREC until four days before formal hearing and he made offers at formal hearing to pay off this amount. He was not charged in the pending Administrative Complaint in this proceeding with any fraud with regard to his failure to respond to service in the FREC client security fund reimbursement proceeding.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint. DONE and ENTERED this 30th day of May, 1989, in Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-6331 The following constitute specific rulings pursuant to Section 120.59(2), F.S., upon the parties' respective Proposed Findings of Fact (PFOF): Petitioner' s PFOF: Petitioner filed no PFOF. Respondent' s PFOF: 1,13,14 Accepted in part; the remainder is rejected as subordinate to the facts as found. 2-5 Rejected as subordinate to the facts as found. 6-12 Rejected as immaterial and as referencing and relying upon matters outside the record as created at formal hearing. 15,16 Rejected in part as subordinate to the facts as found and in part as cumulative and otherwise as mere argument. COPIES FURNISHED: Arthur R. Shell, Jr. Senior Attorney Division of Real Estate Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Mr. Frederick A. Bentley 402 Daytona Avenue Holly Hill, Florida 32017 Darlene F. Keller, Director Division of Real Estate 400 W. Robinson Street Tallahassee, Florida 32802 Kenneth Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0750
The Issue Whether Petitioner is entitled to licensure as a real estate salesperson.
Findings Of Fact Respondent is the agency of the State of Florida responsible for the licensure of real estate professionals. On October 19, 1993, Petitioner submitted to Respondent his application for licensure as a real estate salesperson. In his application, Petitioner disclosed that he had been disbarred as a member of the Florida Bar by decision of the Florida Supreme Court. The actions for which Petitioner was disbarred were described in detail by the Florida Supreme Court's decision in The Florid Bar v. Ellis S. Simring, 612 So.2d 561 (Fla. 1993). The Florida Supreme Court found that there was clear and convincing evidence that Petitioner had repeatedly and intentionally violated trust accounting procedures, had commingled trust and personal funds, and had misappropriated client funds for his personal use. The Florida Supreme Court further found that the Petitioner had violated the Court's order that temporarily suspended him from practice. Petitioner denied that he misappropriated funds from any client, but he admits the other major violations found by the Supreme Court. Petitioner testified that he was suffering from chronic fatigue syndrome and flu-like symptoms when the trust account violations occurred during 1988 and 1989. As a result of a recommendation from an acquaintance, he took large doses of Vitamin C, which aggravated his hemorrhoidal condition and resulted in bleeding. Petitioner testified that his ability to practice law was limited by his medical condition and that his income from his practice suffered as a consequence. Petitioner testified that his secretary acted as his administrative assistant during that period of time and that she was responsible for maintaining his trust account, but he did not attempt to blame her for the admitted deficiencies pertaining to his trust account. Petitioner failed to keep or retain appropriate trust account records, caused the proceeds from the sale of his personal property and from loans he had taken out to be deposited in the trust account, and caused office expenses and personal expenses to be paid out of his trust account. Petitioner settled a personal injury action in which he represented a minor child by the name of Barnett. The proceeds of the settlement in the amount of $45,000 was transferred from his trust account to that of another lawyer who was a non-practicing retired lawyer and friend of the Petitioner. The purpose of that transfer was to hide those funds from the Internal Revenue Service. The Florida Supreme Court found that Petitioner misappropriated a portion of these funds. Petitioner disputes that finding. The misconduct to which Petitioner admitted at the formal hearing and his disbarment from the practice of law by the Florida Supreme Court create a presumption, pursuant to Section 475.17(1)(a), Florida Statutes, that he is not qualified for licensure as a real estate professional. Petitioner did not offer any competent, substantial evidence which would establish that he is honest, truthful, trustworthy, and of good character or that would otherwise rebut the presumption of disqualification.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner's application for licensure as a real estate salesperson should be denied. DONE AND ENTERED this 6th day of September, 1994, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 6th day of September, 1994. COPIES FURNISHED: Ellis Stewart Simring, pro se 3785 Westminister Street Hollywood, Florida 33021 Manuel E. Oliver, Esquire Assistant Attorney General Office of the Attorney General Suite 107 South Tower 400 West Robinson Street Orlando, Florida 32801 Darlene F. Keller, Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether the real estate license of Respondent, Larry L. Morris, should be disciplined for: Advertising property or services in a manner which is fraudulent, false, deceptive, or misleading in form or content in violation of Subsection 475.25(1)(c), Florida Statutes (1998); Failure to prepare required written monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); Using a trade name without proper registration in violation of Rule 61J2-10.034, Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); and Depositing or intermingling personal funds with funds being held in escrow or trust or on condition in violation of Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); Whether the real estate license of Respondent, Investment Marketing, Inc., a Florida Corporation, should be disciplined for: Failure to prepare required written monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); and Depositing or intermingling personal funds with funds being held in escrow or trust or on condition in violation of Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998).
Findings Of Fact Upon consideration of oral and documentary evidence received at the hearing, the following relevant findings of fact are made: Petitioner, Department of Business and Professional Regulation, Division of Real Estate, is the State of Florida agency which licenses and regulates real estate professionals pursuant to Section 20.165, Florida Statutes (1998), and Chapters 120, 455, and 475, Florida Statutes (1998), and the rules in the Florida Administrative Code promulgated pursuant thereto. Respondent, Larry L. Morris (hereinafter "Morris"), is now, and was at all times material hereto, a licensed real estate broker in the State of Florida holding License No. 0061891. Respondent, Investment Marketing, Inc., a Florida Corporation (hereinafter "Investment Marketing"), is now, and was at all times material hereto, a licensed real estate broker holding License No. 0233721. At all times material hereto, Morris was an officer of Investment Marketing and its qualifying broker. Morris has agreed by stipulation that he is a real estate broker and subject to the jurisdiction of Petitioner during the period of the acts alleged in the Administrative Complaint filed in this case. In 1989, a company that Morris had an interest in, Sunset Harbour Condominium Development Company, purchased 57 condominium units in the 72-unit Sunset Harbour Condominium (hereinafter "Condos"). Subsequent to the initial purchase of 57 units, Sunset Harbour Condominium Development Company acquired 10 additional units which were in foreclosure. Sunset Harbor Condominium Development Company subsequently sold all units it owned in Condos. Morris continues to own one unit in Condos. Respondents managed Condos and were sales and rental agents for Condos pursuant to a verbal agreement with the Sunset Harbour Condominium Association. When Condos was acquired, Morris either personally or through an entity in which he had ownership, acquired a tract of land contiguous to Condos on which Sunset Harbour Villas (hereinafter "Villas") was developed by Morris in 1987-1989. Respondents were rental and sales agents for Villas. Condos had the following amenities which are relevant to this case: a swimming pool, a gazebo, and a 200-foot fishing pier. Villas has the following amenities which are relevant to this case: a swimming pool and a clubhouse. Morris testified that he hoped to "integrate the amenities between the two condominium properties." According to Morris, "the Board of Directors has the right to do that [a cross-use of amenities] on a year-to-year basis." Morris had brochures printed in 1997 for Villas which advertised the following amenities: Two swimming pools; Clubhouse; Gazebo; and, a 200-foot pier. Morris testified that when he realized that there would be no integration or cross-use of the amenities of Condos and Villas which made the brochure inaccurate, he redacted, using a "magic marker," the inappropriate amenities from the brochure. In 1997 or 1998, during the construction start-up of Villas, David Woodard obtained an unredacted copy of the brochure at Morris' office. Woodard did not see any redacted brochures. In January 1999, Benjamin Clanton, a Division of Real Estate Investigator, obtained an unredacted copy of the brochure from Morris' office. He also saw redacted brochures in the office. Gene Daughtry, an employee of Investment Marketing, testified that [at some non-specified date] he redacted about 2500 out of 3000 - 4000 brochures and that he never gave a prospective buyer a brochure which had not been redacted. On January 27, 1999, Mr. Clanton performed an audit on Respondents' security account (escrow/trust account). Morris made the requisite information available to him although the escrow liability lists had to be reconstructed. Mr. Clanton discovered that the monthly reconciliations had been done improperly. The trust liability account balance was $3,400.31; the reconciled bank balance was $4,320.31. There was $920.50 in excess funds in the escrow account. On February 10, 1999, Morris wrote Mr. Clanton a letter in which he stated that the excess funds "came from monies that were paid to Investment Marketing for utility bills, etc., that were paid for owners to keep their utilities from being disrupted, and Investment Marketing was never reimbursed. The other overage amounts came from unpaid rental commissions." Morris acknowledged that the monthly escrow reconciliations were not done exactly right and testified that, "I'm guilty." On April 26, 1994, Florida Department of Business and Professional Regulation, Division of Real Estate, filed an Administrative Complaint against Larry L. Morris and Investment Marketing, Inc., which alleged that escrow account irregularities had been discovered during a February 4, 1994, audit (Case Nos. 94-80988, 94-81264). On July 14, 1994, Florida Department of Business and Professional Regulation, Division of Real Estate, and Larry L. Morris and Investment Marketing, Inc., entered into a stipulation which stated inter alia: Respondents neither admit nor deny the allegations contained in the Administrative Complaint, nor that if true, they support a finding of a violation of the Real Estate License Law. Respondents shall not in the future violate Chapters [sic] 455, Florida Statutes, or the Real Estate License Law, or Rules promulgated pursuant thereto. Respondent Larry L. Morris shall be fined $3,000. The fine shall be made payable to the Department of Business and Professional Regulation, Division of Real Estate, within thirty (30) days from the date of filing of the Final Order, or the Respondent's licenses, registrations, certificates, and permits shall be suspended until such fine is paid. This suspension period shall not exceed ten years. Respondent Larry L. Morris shall provide original evidence of having satisfactorily completed a 30- hour broker management post-licensure education course within one year. These education hours are in addition to the hours required to maintain your real estate license. Should these education hours not be completed within the required one-year period all Respondent's licenses, registrations, certificates, and permits shall be suspended until satisfactory evidence that such education hours are successfully completed and that the original grade report from the real estate school has been received by the Florida Division of Real Estate. Respondents Larry L. Morris and Investment Marketing, Inc., shall be reprimanded. * * * The action reflected in the Final Order shall be published in the FREC News and Report as follows: Destin: Larry L. Morris; broker: Reprimanded; fined $3,000; 30 hr. bk. mgmt. course within 1 yr.: Investment Marketing, Inc.: Reprimanded: failed to maintain sufficient funds in escrow account; failed to properly prepare the required written monthly escrow statement-reconciliations. On December 3, 1998, the following advertisement appeared in the Pensacola News-Journal classified advertising section: NAVARRE BEACH Waterfront and Waterview Condos for Sale and Lease. Sale prices starting at $68,900. Long and short term rentals also available. Pool, fishing pier, gazebo, and clubhouse Sunset Villas Development Co. 800-939-1887 Morris testified that he believed the name Sunset Villas Development Company was registered with the Florida Real Estate Commission. Morris testified that the errors made in the December 3, 1998, ad were made by the Pensacola News-Journal. The newspaper failed to include "Investment Marketing, Inc.", but included Investment Marketing's broker's phone number. Morris maintains that this ad is for both Villas and Condos. Subsequent to the January 27, 1999, audit, Morris made changes in his bookkeeping procedures. Mr. Clanton conducted a later audit which revealed appropriate escrow account management.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order finding Morris guilty of violating Subsection 475.25(1)(c), Florida Statutes (1998); Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); Rule 61J2-14.008(1)(c), Florida Administrative Code (1998); and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); finding that Morris did not violate Rule 61J2-10.034, Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); dismissing Count IV of the Administrative Complaint; finding Investment Marketing guilty of violating Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998), and Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); imposing a penalty of $1,000 per count, resulting in $3000.00 for Morris and $2,000.00 for Investment Marketing; suspending Morris' license for one year; and reprimanding Investment Marketing. DONE AND ENTERED this 21st day of February, 2001, in Tallahassee, Leon County, Florida. JEFF B. CLARK 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 21st day of February, 2001. COPIES FURNISHED: Nancy P. Campiglia, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Tower, Suite N308 Orlando, Florida 32801-1772 Steven W. Johnson, Esquire 1801 East Colonial Drive, Suite 101 Orlando, Florida 32803-4820 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue This issues in this case are: (1) Whether Respondent failed to maintain trust funds in the real estate brokerage escrow bank account or some other property depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes; (2) Whether Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealings by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes; and (3) If so, what penalty should be imposed on her real estate license.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular, Chapters 455 and 475, Florida Statutes, and Chapter 61J2, Florida Administrative Code. Respondent Marjorie Koutroubis, is and was at all times material hereto, a licensed Florida real estate broker having been issued License No. BK-039112. Respondent Prestige International Realty Corporation (Prestige International Realty), is and was at all times material hereto, a corporation registered as a Florida real estate broker having been issued Registration CQ-0274989. The business is located at 1111 North Westshore Boulevard, No. 212, Tampa, Florida 33607. At all times material hereto, Respondent Koutroubis was licensed and operating as qualifying broker and officer of Prestige International Realty. On or about September 11, 1997, Michael Day, an investigator with the Department, went to the office of Prestige International Realty to conduct an audit of escrow accounts being held by Respondents. However, Mr. Day was unable to complete the audit on that day because the company's records were unavailable as a result of a computer problem. On January 12, 1998, Mr. Day returned to the office of Prestige International Realty, and performed an audit of two escrow accounts being held by Respondents, the security deposit account, and the disbursement account. In conducting the audit, Mr. Day used and relied upon information contained in documents provided to him by Respondent Koutroubis or her employees. The audit of Respondents' escrow accounts revealed that the security deposit account was balanced but the disbursement account had a shortage. According to Prestige International Realty's December 1997 escrow reconciliation statement, the closing balance or the broker's trust liability was $2,700.00 and the adjusted account balance was $996.15. The difference between the broker's trust liability and adjusted account balance reflected a shortage of $1,703.85 in the escrow account being maintained by Respondents. The subject Prestige International Realty's reconciliation statements contained no description or explanation to explain the discrepancy described in paragraph 9. Moreover, neither Respondent Koutroubis nor Mr. Ricci could explain the reason for the apparent shortage. The subject reconciliation form was prepared by Mr. Ricci and signed by Respondent Koutroubis. Prior to signing the reconciliation sheet, Respondent Koutroubis did not question the figures on the sheet. Rather she accepted the figures provided on the form by Mr. Ricci. After the January 12, 1998, audit of Prestige International Realty's escrow accounts, Mr. Day met with Respondent Koutroubis and discussed the findings of the audit. Mr. Day told Respondent Koutroubis that the only way to correct or resolve the problem of the shortage of funds in the escrow account was to deposit $1,703.85 into Prestige International Realty's account. Respondent Koutroubis did not know why there was a shortage in the escrow account. Nevertheless, in an effort to resolve the problem, she immediately wrote a check for $1,7903.85 and deposited it into the Prestige International Realty's bank account. Mr. Day recorded the findings of the Audit on the Department's Office Inspection and Escrow/Trust Account Audit Form (Audit Form). In the "Remarks" section of the form, Mr. Day noted that in one instance, the improper reconciliation form had been used. With regard to the shortage in the rental distribution account. Mr. Day wrote, "Broker to transfer shortage for rental distribution." In the "Corrective Action" section of the form, Mr. Day wrote, "see above" and "use correct reconciliation sheet." The Audit Form also included items which required the investigator to indicate what, if any, action was taken in a case. The investigator was to respond "yes" or "no" to each of the following: (1) Was a citation issued; (2) Was a notice of noncompliance issued; and (3) Was a complaint docketed. On the Audit Form, Mr. Day indicated that no citation or notice of noncompliance was issued to Respondents but that a complaint was docketed. Respondent Koutroubis and Mr. Day signed the Audit Form on January 14, 1998. After Respondent Koutroubis signed the Audit Form and wrote a check for the amount of the shortage, she mistakenly believed that no further action would be taken with regard to the cited violations. Respondent Koutroubis' belief was based on the fact that no citation or notice of noncompliance was issued and on her understanding of Mr. Day's comments concerning how to resolve the shortage in the escrow account. Neither Mr. Day nor any other Department employee told Respondent Koutroubis or Mr. Ricci that if a check were written to cover the shortage in the escrow account, that the Department would take no further action. Mr. Day believed that the likely reason for the shortage in the disbursement account was that proceeds were disbursed prior to checks clearing. After the subject audit of Respondents' 1997 records, Respondent Koutroubis began using a new form to prepare Prestige International Realty's monthly reconciliation statements. As of the date of the hearing, there is no indication that there have been shortages or overages in the Prestige's escrow accounts since the January 1998 audit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that a final order be entered finding Respondents guilty of violating Section 475.25(1)(k), Florida Statutes; imposing an administrative fine of $1,000.00 on Respondent Koutroubis; issuing a reprimand to Respondent Prestige International Realty; and dismissing Counts II and IV of the Administrative Complaint. DONE AND ENTERED this 9th day of February, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 9th day of February, 2000. COPIES FURNISHED: Ghunise Coaxum, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308 Orlando, Florida 32801 Stephen F. Ricci, Qualified Representative Prestige International Realty Corporation 1111 North Westshore Boulevard Tampa, Florida 33607 Barbara D. Auger, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Herbert S. Fecker, Division Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact In 1981, Barry Kandel, an employee of Allied Publishing Group, Inc., solicited Petitioners to purchase stock in Allied, a Florida Corporation. On May 1, 1981, Petitioners purchased one share of stock in Allied for $13,500. By mid-1982, Allied had gone out of business. Petitioners made unsuccessful demands for the return of their money on Brian E. Walker, the Secretary of Allied; on Thomas W. Kuncl, the President of Allied; and on Kandel. On November 19, 1984, Petitioners filed suit against Kandel, Kuncl, Walker, and Allied. The Civil Complaint filed in Case No. 84-6932 in the Circuit Court of the Fifteenth Judicial Circuit of Florida, in and for Palm Beach County, contained general allegations of fraud. On February 20, 1985, Petitioners obtained a default judgment against Allied only. No evidence was offered in this cause regarding the disposition of the litigation as to the individual defendants. The default judgment contains no factual determinations and does not specify a violation of either section 517.07 or section 517.301, Florida Statutes. Kandel currently resides in Fort Lauderdale, Florida, and Kuncl currently resides in the Gainesville, Florida, area. Kuncl was the last known person to have custody of and control over Allied's books and records. Petitioners filed a claim with Respondent, seeking reimbursement for $10,000 from the Securities Guaranty Fund, pursuant to sections 517.131 and 517.141, Florida Statutes. Their claim was denied by letter dated July 8, 1987, for failure to meet the statutory conditions. Neither Allied nor any individual associated with Allied who dealt with Petitioners was registered or licensed by the State of Florida pursuant to chapter 517, Florida Statutes, in any capacity. Petitioners did not cause a writ of execution to be issued against Allied nor the individuals associated with Allied. Petitioners did not attempt a reasonable search as to whether Allied possessed real or personal property or other assets which may be set off against a proposed claim to the Securities Guarantee Fund. Don Saxon, Director of the Division of Securities and Former Assistant Director, has been the only individual responsible for administering the Securities Guaranty Fund since 1983. The Department's interpretation of section 517.131(2), Florida Statutes, is that it requires a claimant to demonstrate findings of a violation of section 517.07 and/or section 517.301, Florida Statutes, by a licensed dealer, a licensed investment adviser or a licensed associated person. The Department's interpretation of section 517.131(3)(a), Florida Statutes, is that it requires a claimant to provide the Department with a certified copy of a judgment demonstrating a violation of section 517.07 and/or section 517.301, Florida Statutes. The Department's interpretation of section 517.131(3)(b), Florida Statutes, is that it requires a claimant to submit a copy of the writ of execution to the Department. During Saxon's tenure in administering the Securities Guaranty Fund, the Department has not waived any of the statutory requirements for claiming monies from the Fund. Section 517.131 and section 517.141, Florida Statutes, were enacted in 1978 and have remained virtually intact. The legislature did substitute the term "associated person" in place of the term "salesman" in section 517.131(2), Florida Statutes, without comment, although the order of licensed entities in that section was altered. The legislative intent behind the establishment of section 517.131, Florida Statutes, was to eliminate the bonding requirement for "individuals registered to be broker/dealers or investment advisers ... substituting therefor, a 'Security Guaranty Fund' to be funded through an assessment imposed upon them." The legislative intent behind section 517.141, Florida Statutes, was that disbursement from the Securities Guaranty Fund would be made to any person suffering monetary damages as a result of "some violation by a registrant."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered denying Petitioners' claim for payment from the Securities Guaranty Fund. DONE and RECOMMENDED this 25th day of April, 1988, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1988. COPIES FURNISHED: Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 Charles E. Scarlett, Esquire Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32399-0350 Richard O. Breithart, Esquire 818 U.S. Highway One, Suite 8 North Palm Beach, Florida 33408 Charles L. Stutts, Esquire Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
