The Issue The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), (e), and (k), Florida Statutes, 1/ by committing the acts alleged in two administrative complaints; and, if so, what, if any, penalty should be imposed.
Findings Of Fact 1. Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0377781. The last license issued to Respondent was issued as a broker at Wilson Realty International, 1059 Aurora Road, Melbourne, Florida 32935. The Myrie Transaction On July 22, 1993, Respondent negotiated a property management agreement with Harold E. and Bernia L. Myrie (the "Myries") who are residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Myries and located in Florida (the "Myrie property"). On August 20, 1993, Respondent negotiated a lease agreement for the Myrie property with Mr. Eric A. Bogle and Ms. Jearlene Davis, as tenants. The tenants paid Respondent $2,590.60 in rental payments for the period August 20 through November 18, 1993. Respondent failed to deposit the rental payments into her escrow account. On November 19, 1993, Respondent issued check number 1501 to the Myries in the amount of $562.50. Respondent represented to the Myries that $562.50 was the net amount due them. The Myries deposited check number 1501. However, the check was returned for insufficient funds. Respondent replaced check number 1501 with another check for $562.50. There were sufficient funds to cover the second check. On December 29, 1993, the Myries cancelled their property management agreement with Respondent. They demanded the balance of $2,028.10. Respondent claimed that $562.50 was the total amount Respondent owed the Myries. Respondent represented that she had incurred expenses for repairs and maintenance to the Myrie property. Respondent never provided an accounting of either the rental proceeds received from the tenants or the alleged expenses for repairs and maintenance. 2/ Respondent failed to produce documents Petitioner needed to conduct an audit of her escrow account. Respondent failed to produce deposit receipts for rent and cancelled checks and written receipts for expenses incurred by Respondent. After Respondent failed to comply with two requests to produce the records Petitioner needed to conduct an audit, Petitioner subpoenaed Respondent's records on August 1, 1994. 3/ Respondent agreed to produce her records for review and audit on August 12, 1994. However, Respondent failed to keep her appointment and never produced the documents subpoenaed by Petitioner. 4/ Respondent misappropriated $2,028.10 paid to her by the tenants and converted those funds to Respondent's personal use. The tenants paid those funds to Respondent in trust for the Myries. The Myries authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false pretenses to justify her misappropriation and conversion of the escrow funds. Respondent's failure to account for escrow funds paid to her in the Myrie transaction and her failure to produce records needed by Petitioner to audit Respondent's account is culpable negligence. When considered in their totality, the acts committed by Respondent in the Myrie transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Florida Administrative Code Rule 61J2-14.012(1). 5/ Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 2. The Timoll Transaction In June, 1993, Respondent negotiated a property management agreement with Lawrence and Sheila Timoll (the "Timolls") who were residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Timolls and located in Florida. (the "Timoll property"). On July 14, 1993, Respondent procured tenants for the Timoll property. William and Sambri Dulmage (the "Dulmages") executed a one year lease. Pursuant to the terms of the lease, the Dulmages agreed to pay a security deposit of $625 and rent at the monthly rate of $600. Respondent received $4,800 from the Dulmages as payment of rent, a security deposit, and expenses associated with the Timoll property. Respondent never delivered any part of the $4,800 to the Timolls. Respondent represented to the Timolls that they were not entitled to any of the $4,800 because the Dulmages had vacated the property and stopped paying rent. Respondent also represented that she had incurred expenses for repairs and maintenance to the Timoll property. 6/ The Dulmages in fact occupied the Timoll property for the duration of the lease and timely paid all amounts in accordance with the terms of the lease. The Timolls knew that the Dulmages were complying with the lease and arranged for the rent to be paid directly to the Timolls in February, 1994. With three minor exceptions, 7/ Respondent did not incur expenses for maintenance and repairs to the Timoll property. 8/ From July 14, 1993, through February 22, 1994, the Timolls made repeated demands for Respondent to deliver the rent and security deposit, and to account for the expenses allegedly incurred by Respondent. Respondent produced property accounting forms describing expenses for maintenance and repairs to the Timoll property. With three minor exceptions, the accounting forms provided by Respondent contained fabricated expenses for maintenance and repairs. 9/ Respondent misappropriated $4,419.45 10/ paid to her by the Dulmages and converted those funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Timolls. The Timolls authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false pretenses to justify her misappropriation and conversion of escrow funds. Respondent's failure to account for the escrow funds paid to her in the Timoll transaction and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Timoll transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2- 14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 3. The Veil Transaction On November 29, 1993, Respondent entered into a short term lease agreement between Respondent, as the landlord, and Herman J. and Joyce Veil (the "Veils") as tenants (the "Veil transaction"). The Veils lived out of state. They paid Respondent a deposit of $1,919.36 to secure the seasonal rental of Unit 511, Ocean Walk Condominiums ("unit 511"). On March 1, 1994, the Veils traveled to Melbourne and discovered that unit 511 was not available. Respondent never provided the Veils with a rental unit of any kind. The Veils demanded the return of their deposit. On March 11, 1994, Respondent issued check number 1127 in the amount of $1,394.01. Respondent represented to the Veils that $1,394.01 was the total amount due. Respondent deducted $525.35 for motel charges allegedly incurred by Respondent to provide the Veils with temporary lodging for 11 days while Respondent attempted to procure an alternate rental for the Veils. The deduction of $525.35 was not authorized by the Veils. The Veils did not agree to pay for their own motel room. In addition, the motel charges deducted by Respondent included charges for two nights paid by the Veils. After Respondent issued check number 1127 for $1,394.01, Respondent ordered the bank to stop payment on the check. The bank erroneously cashed the check and subsequently requested the Veils to return the proceeds. The Veils refused. Respondent misappropriated $525.35 paid to her by the Veils and converted those escrow funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Veils' seasonal condominium. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds belonging to the Veils. Respondent engaged in false pretenses to justify her misappropriation and conversion of the escrow funds. Respondent's failure to account for escrow funds paid to her in the Veil transaction and her failure to produce records needed by Petitioner to audit Respondent's accounts constitutes culpable negligence. When all of the facts and circumstances surrounding the Veil transaction are considered, Respondent's attempt to stop payment of her check to the Veils constitutes dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 4. The Sella Transaction On February 14, 1994, Respondent procured a construction contract between Militano Construction, Inc. (the "seller"), and Mr. Lino Sella, (the "buyer"). The buyer lived in Italy and required an interpreter for his negotiations with Respondent. On February 14, 1994, the buyer entrusted Respondent with an escrow deposit of $12,250. The buyer authorized Respondent to administer funds entrusted to her because the buyer was in Italy. 11/ On February 15, 1994, Respondent cashed the check for the escrow deposit. Respondent obtained a cashier's check for $12,250 made payable to "Wilson Realty." Respondent then endorsed the cashier's check for her personal use. 12/ In July, 1994, the buyer authorized Respondent to release the escrow deposit to the seller upon issuance of a certificate of occupancy ("CO") by the City of Indian Harbour Beach, Florida (the "city"). The city issued the CO on September 1, 1994. After the city issued the CO, the seller repeatedly made verbal demands for Respondent to deliver the escrow deposit. On September 9, 1994, the seller wrote a letter to Respondent demanding the escrow deposit. On September 13, 1994, the buyer physically inspected the house, found that it was acceptable, and again authorized disbursement of the escrow deposit. The seller again demanded the escrow deposit. Respondent never delivered the escrow deposit. Respondent never accounted for the deposit to the seller, the buyer, or Petitioner. The seller was unable to pay approximately $9,000 to subcontractors used to construct the buyer's house. The subcontractors recorded mechanics' liens against the Sella property and precluded the seller from delivering good and sufficient title to the buyer. The seller's failure to provide the buyer with good and sufficient title precluded the seller from satisfying its obligations under the terms of the contract with the buyer and caused the seller to breach the contract. The buyer incurred legal expenses in an attempt to quiet title to his house. The seller incurred legal expenses in an attempt to recover the escrow deposit from Respondent. Respondent misappropriated a $12,250 escrow deposit in the Sella transaction and converted that escrow deposit for personal use. The escrow deposit was given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of the escrow deposit in the Sella transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's escrow account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Sella transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 5. The Stanley Transaction In March, 1994, Respondent procured a construction contract between Atlantic Construction, Inc. (the "seller"), and Trevor and Carol Stanley (the "buyers") who are residents of New York. The buyers entrusted Respondent with an escrow deposit of $7,800. The buyers were unable to qualify for a mortgage and terminated the agreement in accordance with the terms of the construction contract. The buyers agreed to forfeit $500 of the escrow deposit to Respondent as real estate commission. On July 12, 1994, the buyers demanded that Respondent return $7,300 of their escrow deposit. Respondent claimed the entire $7,800 escrow deposit and neither delivered the $7,300 agreed to by the buyers nor accounted for any of the escrow deposit. Petitioner was unable to audit Respondent's escrow account. The bank where the escrow account was maintained closed the account because the account was overdrawn. The bank charged off $3,483.45 in overdrawn funds. Respondent misappropriated a $7,300 escrow deposit in the Stanley transaction and converted the escrow deposit to Respondent's personal use. Those funds were given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds in the Stanley transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Stanley transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 6. Respondent's Conduct Respondent evidenced a gross disregard for the rights and property of others, applicable laws, and the legal process. 13/ Respondent's conduct demonstrated culpable intent to commit the offenses for which she is charged. Respondent has made no attempt at restitution to any of the five clients she harmed, and has made no attempt to pay the overdraws charged off by the bank. Respondent has made no attempt to pay the Sella subcontractors or otherwise remove any cloud on the title to the Sella property. Respondent ignored valid subpoenas issued by Petitioner. Respondent engaged in dilatory acts and misrepresentations. Respondent delayed this proceeding through repeated false pretenses that she was represented by counsel who was unable to appear for previously scheduled formal hearings. Respondent participated in this proceeding for a frivolous purpose. There was a complete absence of a justiciable issue of law or fact in Respondent's defense. Respondent's defense was baseless and a sham. It was no more than a stonewall defense presented for the purpose of delay. Respondent failed to show any of the facts asserted in her defense. She called no witnesses and submitted no material exhibits for admission in evidence. Respondent's cross examination of Petitioner's witnesses nominally attempted to create issues but failed to produce any competent and substantial evidence to support those issues. Respondent repeatedly attempted to establish issues either by unsworn representations or by arguing with witnesses during cross examination. Respondent's sworn testimony at the formal hearing was not credible and was unpersuasive. No competent and substantial evidence supported her testimony. Any evidence that Respondent adduced during her testimony, her cross examination of other witnesses, and in her exhibits was immaterial. Respondent's conduct in this proceeding constituted a reckless waste of quasi-judicial resources as well as a waste of the time and money of Petitioner and its witnesses. Many of those witnesses had already lost time and money as a result of Respondent's conduct before this proceeding began.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(b), (d)1., (e), and (k); and Rule 61J2- 14.012(1); revoking Respondent's real estate license; and imposing a fine of $20,000. RECOMMENDED this 15th day of November, 1995, in Tallahassee, Florida. DANIEL S. MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of November 1995.
The Issue The issues in this case include whether Respondent is guilty of having committed culpable negligence in a business transaction or failed to maintain trust funds in a proper account until disbursement was authorized and, if so, the appropriate penalty.
Findings Of Fact Respondent has been a licensed real estate broker in the State of Florida since 1983 and holds license number 0405933. His most current license was as a broker trading as Realty Trend. Respondent started Realty Trend in 1985 for the primary purpose of managing rental properties. Although he had little or no training or experience in accounting, Respondent retained considerable responsibility for the day-to- day bookkeeping associated with his business, though at times he employed a bookkeeper. Respondent maintained one account for sales transactions, in which he participated as the broker, and one account for property management activity. Respondent participated in few sales transactions and is phasing out of that part of the business. All escrow monies held by Respondent were kept in interest-bearing accounts. Although Respondent retained the interest, he disclosed this fact to the parties through the sales contract. Within about 18 months, Respondent had acquired about 100 properties to manage. Respondent decided to automate the bookkeeping and purchased a computer program that would write checks, track income and expenses, generate reports, and generally handle all aspects of bookkeeping. The program was designed to assist in property management operations. Emphasizing service to property owners, Respondent had always tried to send his checks for rent collected the past month between the tenth and fifteenth of each month. By August, 1989, Respondent had been warned by Petitioner that he had to allow two or three weeks for tenant's checks to clear and determine what emergency maintenance expenses might be incurred. Through a combination of ignorance about bookkeeping, his responsibilities as a broker holding escrow monies, and the property management computer program, Respondent mishandled his trust account. His repeated bookkeeping errors and failure to take corrective action allowed a sizable shortage to accumulate by the time Petitioner conducted a routine office audit on November 17, 1989. Respondent cooperated fully with the audit and promptly provided Petitioner's investigator with a box full of bank statements. His account was reaudited on January 8, 1990. Poor bookkeeping prevents a precise determination of the shortage, but it exceeds $10,000. It is difficult to understand how Respondent's books became so confused as to become nearly worthless. There was no evidence of fraudulent intent. It appears as likely that Respondent overpaid property owners as that he overpaid himself. Respondent's ongoing ignorance of his serious trust account shortages or, in the alternative, repeated failure to solve recognized trust account shortages represents culpable negligence. Even by the time of hearing, Respondent candidly admitted that he could not provide an accurate figure for the shortage and had not yet been able to repay the deficiency, although he intended to do so.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order reprimanding Respondent; imposing an administrative fine of $500; requiring Respondent to complete an approved 60-hour course; suspending his license for a period of six months, commencing retroactive to the date on which Respondent cease operations due to the emergency suspension; and placing his license on probation for a period of three years following the conclusion of the suspension, during which time Respondent shall file escrow account reports with the Commission or other person designated by the Commission at such intervals as the Commission requires. DONE and ORDERED this 8 day of October, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8 day of October, 1990. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Attorney Steven W. Johnson Division of Real Estate Florida Real Estate Commission 400 W. Robinson St. Orlando, FL 32801-1772 Thomas I. McIntosh 13542 N. Florida Ave. Tampa, FL 33613 Attorney Neil F. Garfield Envirwood Executive Plaza, Suite 200 5950 West Oakland Park Blvd. Lauderhill, FL 33313 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue The issue for consideration in this case is whether the Respondents' licenses as real estate broker and brokerage corporation, respectively, should be disciplined because of the matters set out in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Florida Real Estate Commission was the state agency responsible for the licensing and regulation of real estate salespersons, brokers, and brokerage operations in Florida. The Respondents, Arthur B. Karns and Karns Real Estate Inc., were a licensed real estate broker and brokerage corporation, respectively. Sharon Thayer has been an investigator with the Florida Department of Professional Regulation's Division of Real Estate for over 3 1/2 years. As a part of her duties, she is required to conduct random, no-notice inspections of real estate brokerage offices in Florida. As a part of these inspections, she conducts audits of the broker's escrow account and over time has conducted approximately 1,000 audits. In her audits, she follows a standard audit procedure to reconcile the trust liability of the broker with the escrow account bank balance. In early September, 1991, Ms. Thayer conducted an escrow audit and office inspection of the Respondent's company. During her initial visits, on September 3 and 5, 1991, she requested he furnish her with the office records pertinent to his trust escrow account. Respondent promptly provided most of the records excepting only the account reconciliation forms required by the Commission. When Respondent provided Ms. Thayer with the records, including what he felt were the reconciliations, she reviewed them and then discussed them with him, indicating wherein they were deficient and what, in addition, she would need. In her initial report, completed on the conclusion of the initial visit, she indicated there was an overage of $3,452.75 in the Respondent's escrow account. This figure was in error. She also noted that Respondent was not accounting for his trust liability and indicated he had 5 days in which to take corrective action and provide documentation of the action taken. When she returned for a follow-up visit on September 20, 1991, Ms. Thayer noted that the original note of overage had been in error and that the account now balanced. To achieve balance, however, she referred to the original $500.00 in seed money Respondent had used to open the escrow account. This covered errors in the account as of December, 1990 and service charges. Without this, she noted, the account would have been short by $446.45. Ms. Thayer determined that the Respondent had opened his escrow account with $500.00 of his own funds as seed money. She contend this was improper as the Department allows only $200.00 of seed money which is to be reported each month on the account reconciliation. The $200.00 "limit" is relatively recent. At the time in issue, she claims, the "limit" was set, by unwritten, unpublished Department policy, at $100.00. The only evidence of the existence of such a policy is an article in the Fall, 1991 FREC newsletter, written by Howard M. Gunter, Jr., then Chairman, which notes: There is an unwritten rule that currently allows a broker to keep a minimum amount in his escrow account to cover bank charges, .... The April, 1992 edition of the Central Palm Beach County Association of Realtors' Realtor Review advises of new FREC rules, one of which allows a broker to maintain up to $200.00 of his own or the company's funds in the escrow account to keep it open or to pay for bank monthly service charges. Ms. Thayer's investigation also appeared to indicate that in January, 1991, Respondent disbursed an $850.00 security deposit to lessors of a rented unit when the actual deposit collected was only $500.00. This was also determined to be in error. The evidence demonstrates that on January 3, 1991, Respondent drew check number 1040 on his escrow account to open an escrow account for the Alexandre to Livingston rental. The deposit of $1,700.00 in that case included an $850.00 security deposit. This money was not disbursed to the client, however, as it was placed in an escrow account for that lease. In any case, the security deposit should have been only $500.00 as that was all that had been collected by the prior agent and transferred to the Respondent. When the deposit was made here, Respondent, whose practice was to collect the first and last month rent in advance, along with a security deposit of one month rent, mistakenly assumed the prior agent had done the same. When he learned of his mistake, by letter dated September 13, 1991, he notified the Alexandre's of the mistake and noted the excess $350.00 would be paid back to Karns Real Estate, Inc. Therefore, the extra $350.00 in the trust account had been placed there by Respondent from his own funds, not from any client funds and was due back. Since the $96.45 in bank charges were also accounted for previously and deducted, there was in actuality no shortage. Ms. Thayer also discovered that with regard to two contracts for the sale of real property, both dated in early May, 1991, between E. Buwalda as seller and Ronald Cecere as buyer on one, and Cecelia Barraclough as seller and Jeanne Cecere as buyer on the other, $100.00 in cash was accepted as a partial down payment on each, with each contract calling for an additional deposit of $2,900.00. A special clause in each contract provided: The purchaser will post a Certificate(s) of Deposit with a face amount of at least $3,000.00 with Karns Real Estate, Inc. to be held in escrow as and for the $2,900.00 additional deposit. The Certificate(s) of Deposit can be returned to the Purchaser if and when the Purchaser posts $2,900.00 in cleared funds to cover the additional deposit. In fulfillment of that clause requirement, the Ceceres deposited with the Respondent CD Numbers 020002358756 and 020002359408, from Nova Savings Bank, each in the amount of $2,000.00, the former dated October 24, 1990 and the latter dated December 3, 1990, both showing Jeanne A. Cecere as trustee for Patrick J. and Ronald P. Cecere. The certificates also reflected they were "Not Transferable except on the books of Nova Savings Bank." By his own admission, at no time did Respondent notify either of the sellers that the certificates he held on their behalf as additional deposit were not transferable outside the Nova Savings Bank. At the same time he received the certificates as deposit on the Barraclough property, Respondent also received an additional $1,000.00 in cash to constitute the balance of the $3,000.00 deposit called for in the contract. Aside from a letter from the Ceceres' chastising the Department for its action against Respondent and expressing outrage that the agency should have a negative opinion as to the propriety and legality of the Respondent's activities, there is no independent evidence of any additional deposit placed with regard to the Buwalda contract. In any event, when the matter was noted by Ms. Thayer, the Ceceres, by checks dated September 5, 1991 in the amounts of $1,900.00 each, made payable to Karns Realty, Inc., replaced the two certificates. When Ms. Thayer discussed this matter with Mr. Karns, he seemed surprised at her concern. He indicated he felt accepting the certificates was the same as taking jewelry as security. However, he promised to get replacement security and, as was seen, did so immediately. Ms. Thayer was also concerned about the Respondent's apparent inability to properly reconcile his escrow account with the related bank balance. Her audit revealed he was using a lengthy, self-developed form to balance the checking account statement but this is not enough. There is no requirement that any particular form be used, but the Commission had developed a sample form which contains all the information required in a proper reconciliation and Department rules set out those requirements. On May 13, 1991, the Department of Professional Regulation, in a letter to all real estate brokers, indicated the concern of the Commission that brokers be aware of and comply with their responsibilities regarding monthly escrow account reconciliation. The letter cited the provisions of Commission Rule 21V-14.012 which, while noting there is no official form to be used, reminds brokers the reconciliation must contain certain required information. The sample form, referenced above, requires a bank reconciliation and, in addition, a trust liability reconciliation. Ms. Thayer concluded Respondent had, indeed, completed a full bank reconciliation, but had not completed the additionally required trust liability reconciliation and merged the two. Notwithstanding Respondent's continuing protestations that he had done a complete reconciliation, the evidence indicates rather that he has not. As Respondent's own exhibit, an extract from the 1991 Gaines & Coleman continuing education book points out at paragraph 23 on page 7, the provisions of the rule on escrow reconciliation "is much more than a mere balancing of checkbook accounts." The evidence demonstrates Respondent did no more than that and his reconciliations were not adequate. Mr. Geil, who assisted Ms. Thayer in the audit, has reviewed between 100 and 150 offices in addition to Respondent's office. Of all of these, he would rate Respondent among the 5 or 6 brokers who did the most detailed reconciliations, but he cannot say, from what he saw of Respondent's records, whether Respondent was making a bona fide effort to do an accurate reconciliation. It is clear, however, that, as Respondent repeatedly asserted at hearing, everyone makes mistakes, and Respondent's delicts, established by the evidence, do not show any fraudulent or criminal intent. As Ms. Thayer noted, she found no evidence of fraud, theft or an abuse of trust money for Respondent's own purposes, and the Commission has received no complaints about him from any of his clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that a Final Order be entered in this case by the Florida Real Estate Commission dismissing Counts I through VI of the Administrative Complaint, but placing the licenses of Respondents, Arthur B. Karns and Karns Real Estate, Inc. on probation for a period of one year under such terms and conditions, specifically including post licensure education, as the Commission may require, and imposing a reprimand on the Respondent, Arthur B. Karns. RECOMMENDED this 21 day of August, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23 day of August, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1266 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 4. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated except for the word shortage which should be prefaced by the work "apparent." Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. First three sentences accepted. Balance is a comment on the evidence. FOR THE RESPONDENT: & 2. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and resolved in favor of Respondent. Accepted and resolved in favor of Respondent. 6A -C. Accepted and discussed within the body of the Order. 6D. Not a Finding of Fact but a discussion of the evidence. 6E & F. Not relevant. 7A - C. Not a Finding of fact but a statement of evidence presented. COPIES FURNISHED: James H. Gillis, Esquire DPR - Division of Real Estate Hurston Building, N-308 400 West Robinson Street Orlando, Florida 32801-1772 Arthur B. Karns,. pro se Karns Real Estate, Inc. 6346-63 West Lantana Road Lake Worth, Florida 3343 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact Petitioner is an agency of the State of Florida charged with the responsibility and duty to prosecute violations of the statutes and rules regulating the practice of real estate in the State of Florida. Respondent, Benjamin C. Rolfe, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0318091 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Rolfe was as a broker with Squires Realty of the Palm Beaches, Inc., 721 U.S. 1, #217, North Palm Beach, Florida. Respondent, Duane C. Heiser, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0038233 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Heiser was as a broker effective February 8, 1991, at Duane C. Heiser Realty Co., 1312 Commerce Lane A1, Jupiter, Florida. On or about December 12, 1998, a Final Order was issued by the Florida Real Estate Commission and received by Mr. Heiser whereby his real estate broker's license was suspended for two (2) years from January 12, 1989, through January 10, 1991. During the month of October 1989, Mr. Heiser violated the lawful suspension order of the Commission by personally delivering rental checks to and ordering the disbursement of escrow funds from the Property Management-Operating Account, which is an escrow account, of Squire's Realty Company of the Palm Beaches, Inc. Between March 22 and March 26, 1990, the escrow account records of Mr. Rolfe, who was the qualifying broker for Squire's Realty of the Palm Beaches, Inc., were audited by Petitioner's authorized representatives. The Escrow/Trust Account Audit revealed that Respondent Rolfe failed to properly document and reconcile the Property Management-Operating Account, which is an escrow account. Mr. Rolfe was responsible for this account. Mr. Rolfe was negligent regarding the management of this escrow account by allowing a suspended licensee, Mr. Heiser, access to this account. Mr. Rolfe and Petitioner stipulated that the appropriate penalty for Mr. Rolfe's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation Mr. Rolfe would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Rolfe would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Rolfe to remain active and current as a real estate broker in the State of Florida. Mr. Heiser and Petitioner stipulated that the appropriate penalty for Mr. Heiser's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation, Mr. Heiser would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Heiser would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Heiser to remain active and current as a real estate broker in the State of Florida.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which: Dismisses Counts I, III, and V of the Administrative Complaint; Finds Mr. Heiser guilty of having violated a lawful order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), Florida Statutes, as alleged in Count II of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Heiser and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Heiser pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Heiser be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Heiser to remain active and current as a real estate broker in the State of Florida. Finds Mr. Rolfe guilty of culpable negligience in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, as alleged in Count IV of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Rolfe and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Rolfe pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Rolfe be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Rolfe to remain active and current as a real estate broker in the State of Florida. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 30th day of December, 1991. 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 30th day of December, 1991. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Neil F. Garfield, Esquire Garfied & Associates, P.A. World Executive Building Suite 333 3500 North State Road 7 Fort Lauderdale, Florida 33319 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
The Issue The issues are whether Respondents committed fraud, in violation of Section 475.25(1)(b), Florida Statutes; failed to prepare monthly trust account reconciliations, in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code; failed to account for or deliver funds, in violation of Section 475.25(1)(d)1, Florida Statutes; and failed to preserve books and accounts, in violation of Rule 61J2-14.012(1), Florida Administrative Code.
Findings Of Fact At all material times, Respondent Maria L. Nuevo (Respondent) was a licensed real estate broker, holding license number 3006548. Respondent was first licensed, as a real estate salesperson, in Florida in 1984 and became a broker in 1986. Respondent is president of, and qualifying broker for, Respondent Realco Realty, Inc. (Realco Realty), which is a corporation registered as a real estate broker, holding license number 1011738. In late August or early September 2000, Respondent prepared a Residential Sales and Purchase Contract (Contract) on behalf of Omar Canizares, as buyer, to purchase a residence at 10620 Southwest 139th Street in Miami (Property). The Contract provided for a purchase price of $260,000 and a deposit of $1000 to be held by Realco Realty. Respondent presented the Contract to Zoila de Castro, a real estate broker who was representing Antonio and Lorraine Lambo, and Mrs. Lambo. The record is poorly developed on these points, but it appears that Mr. and Mrs. Lambo jointly owned the Property and that both of them never signed the Contract. Respondent left the Contract with Mrs. Lambo because Mr. Lambo was out of town. A few days later, Ms. de Castro returned the Contract to Respondent, intending to convey a counteroffer that raised the purchase price to $265,000 and the deposit to $5000--to be paid within three days after the inspection. However, the Contract delivered by Ms. de Castro to Respondent is notable for two omissions--a signature of one of the Lambos and a deadline for Canizares' acceptance of the counteroffer. Ms. de Castro's testimony that she delivered to Respondent the only original contract with signatures of both Lambos is discredited for two reasons. First, Respondent would likely use the better version of the Contract--i.e., the one with both sellers' signatures--when providing a copy to the appraiser. Second, Ms. de Castro appears to have maintained, at best, an imperfect grasp of all that was transpiring in this attempted transaction and may be claiming to have delivered a fully signed contract--though still without a deadline for Mr. Canizares' acceptance--in order to place herself in a better light. At this point in the transaction, the lack of an enforceable agreement between Mr. Canizares and the Lambos should have been obvious to the Lambos' real estate broker, but it was not. The testimony depicts a series of unanswered letters and unsatisfied demands, as the Lambos initially tried to get the deal to close and eventually tried only to get the deposits, which they believed now totalled $5000. In fact, neither Respondent held any deposit. Although relieved from the obligation to collect another $4000 in deposit, due to the failure of the parties to come to an agreement, Respondents had misrepresented to the Lambos and Ms. de Castro that they held the initial $1000 deposit. Although Petitioner has failed to prove other fraudulent acts by either Respondent toward the Lambos or Ms. de Castro, Petitioner has proved another fraudulent act by Respondents in connection with this transaction. Exploiting Ms. de Castro's lack of diligence, Respondents appear to have shopped the Contract. On September 22, 2000, Respondent ordered an appraisal on a form showing the purchase price as $325,880. At the request of the appraiser, Respondent sent to the appraisal a copy of an altered Contract, which provided for a purchase price of $310,100 and reflected total deposits of $5000. The Lambos-Canizares sale never closed, and the Lambos never received any money representing the deposit that they claimed to be owed. Respondents opened an escrow account in September 2000, but had never performed written monthly escrow reconciliation for their trust account through the date of the audit in February 2001. Additionally, at the time of the audit, Respondents were unable to produce any documentation pertaining to their real estate practice. However, Respondents later produced banking records and reconciliations for January and February 2001, which were undoubtedly prepared after the February 2001 audit.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the real estate broker licenses of Maria L. Nuevo and Realco Realty, Inc. DONE AND ENTERED this 29th day of May, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 29th day of May, 2003. COPIES FURNISHED: Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802, North Orlando, Florida 32801 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christopher J. DeCosta Senior Attorney Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N-809 Orlando, Florida 32801 Michael H. Wolf Michael H. Wolf & Associates, LLC. 3832 North University Drive Sunrise, Florida 33322
Findings Of Fact The Department rules on the Proposed Findings of Fact and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Finding numbers 1 and 2 are accepted to the extent that factual matters are discussed, consistent with the Final Order. Proposed Finding numbers 3-6 are accepted as consistent with the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS ON BEHALF OF PROTESTANTS AND INTERVENORS Proposed Findings 1-32 concern proposed facts relevant to all applications, and Proposed Findings 45-55 concern proposed facts concerning the specific application of DBT Trust Company of Florida. Proposed Finding numbers 1-5, 10-17, 26-30 are accepted to the extent that they are generally consistent with the Hearing Officer's Finding or with the Final Order. Proposed Finding numbers 6-9, 18-25, 31 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 45, 46, 51-55 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 47-48 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings of Fact or with the Final Order. PROTESTANT'S AND INTERVENOR'S EXCEPTIONS Exception numbers 1, 3-7 are rejected and the Hearing Officer's ruling is affirmed. Exception number 2 is rejected. Exception number 8 is misplaced. Many Findings of Fact submitted by the parties were not specifically incorporated into the Findings, but were consistent with the Findings, and have been accepted in this Final Order. Those that have not, are deemed inconsistent with the Hearing Officer's Findings, or are irrelevant or immaterial. Exception number 9 is rejected. All parties had an opportunity to challenge the incipient policy of the Department, pursuant to McDonald vs. Department of Banking and Finance, 346 So.2d 569 (1st DCA Fla. 1977) Exception number 10 was not considered a significant factor, and the Department followed its incipient policy and other trust company order regarding capital adequacy. Exception numbers 11-16 are rejected as inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. Exception numbers 17-26 concern Proposed Findings which have been discussed above, and considered in paragraphs 6-9. SUPPLEMENTAL POST HEARING SUBMISSION OF FIRST NATIONAL BANK IN PALM BEACH AND BESSEMER TRUST COMPANY OF FLORIDA This submission is primarily limited to the issue of transfer accounts. Points 1-3 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. The Hearing Officer made specific findings as the trier of fact, regarding the transfer of accounts, and those Findings have been adopted by the Comptroller. SCHEDULE "A" Thomas C. Oldham, Esquire Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Stephen E. Day Attorney for Respondent Bankers Trust Company of Florida Taylor, Day, Rio & Mercier 701 Fisk Street, Suite 320 Jacksonville, Florida 32204 (904) 356-0700 John A. Jones Bruce Roberson Attorneys for DBT Trust Company of Florida Case No. 79-1228; 79-1234 Holland and Knight 610 North Florida Avenue Tampa, Florida 33601 (813) 223-1621 John Radey Holland and Knight Post Office Drawer 810 Tallahassee, Florida 32302 (904) 224-7000 J. Thomas Cardwell Attorney for Petitioner Florida Bankers Association and Intervenor Atlantic National Bank of Palm Beach County Akerman, Senterfitt and Eidson Post Office Box 231 Orlando, Florida 32802 (305) 843-7860 Bruce Culpepper Attorney for Petitioner Florida Association of Registered Bank Holding Companies, Inc. 350 East College Avenue Tallahassee, Florida 32301 (904) 222-6071 James G. Pressly, Jr. Attorney for Intervenor First National Bank in Palm Beach Attorney for Intervenor Bessemer Trust Company of Florida Gunster, Yoakley, Criser, Stewart and Hirsey, P.A. First National Bank Building Palm Beach, Florida 33480 (305) 655-1980 H. David Faust Attorney for Intervenor Bank of Palm Beach and Trust Company Attorney for Intervenor First Bank and Trust Company of Boca Raton Burns, Middleton, Farrell and Faust 205 Worth Avenue Palm Beach, Florida 33480 (305) 655-5311 Robert I. MacLaren, II Attorney for Intervenor Boca Raton National Bank Osborne and Hankins Post Office Drawer 40 855 South Federal Highway, Suite 200 Boca Raton, Florida 33432 (305) 395-1000 Ralph J. Blank, Jr. Attorney for Intervenor First National Bank and Trust Company of Riviera Beach Blank, Will and Benn Post Office Box 2100 West Palm Beach, Florida 33402 (305) 832-2889 John C. Miller, Jr. Attorney for All Intervenors Post Office Box 46 Mobile, Alabama 36601 (205) 432-1414 Phillip G. Newcomm Bowman Brown Arnold L. Berman Attorneys for Respondent U.S. Trust Company of Florida 1000 Southeast First National Bank Building Miami, Florida 33131 (305) 358-6300
The Issue Whether or not Respondent's insurance agent licenses should be disciplined for violating Sections 626.561(1), 626.611(4), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(4), and/or 626.621(6) F.S. [1990].
Findings Of Fact The Respondent is currently licensed in Florida as a life and health insurance agent, and was so licensed at all times material. On or about November 13, 1985, Respondent entered into a contract with Mutual Savings Life Insurance Company. That contract required Respondent to remit to Mutual Savings all insurance premiums collected on behalf of that company and that Respondent would hold all monies collected on behalf of Mutual Savings in trust for it. From November 13, 1985, to October 22, 1990, Respondent was employed by Mutual Savings as a debit agent. Mutual Savings' company policy is that all monies collected are to be remitted to Mutual Savings on a weekly basis and that all collections in excess of $100.00 are to be converted to cashier's checks or money orders. Respondent failed to remit any monies to Mutual Savings for the week of October 22, 1990. Respondent told his superiors in October 1990, and testified at formal hearing, that his failure to remit premiums to Mutual Savings was a result of a burglary of his car whereby his bank bag containing cash in excess of $1,200.00 of his then-current debit collections was stolen. The police report completed in October 1990 stated that the Respondent had told the police that Respondent's vehicle was secured at the time of the burglary, but that the officer was unable to find any sign of forced entry to Respondent's vehicle. Respondent testified at formal hearing that he thought he had locked his car the night of the burglary, but was no longer certain. Respondent's failure to remit premiums to Mutual Savings during the week of October 22, 1990 prompted William Herring, Respondent's immediate superior at Mutual Savings, to conduct an audit of Respondent's agent's account. Initially, Mr. Herring did not go to every insured but relied in part on their payment patterns. Eventually, the audit was performed over a four week period, during which Mr. Herring personally checked the premium receipt books of the insureds on Respondent's account. During the course of this audit, Mr. Herring completed four sets of forms entitled "Manager's Report of Unreported Collections." These forms listed the shortage for each insured on Respondent's account and showed that Respondent had a total account shortage of $1,655.34, rather than a shortage of only $1,200.00. When initially presented with Mr. Herring's accusations of a shortage in October 1990, Respondent acknowledged that he had a shortage on his account and signed the aforementioned reports. Respondent signed some of these reports after Mr. Herring had visited with the insureds and completed the forms, but Respondent also signed some of these reports in blank, prior to their being completed by Mr. Herring. Respondent signed the blank reports so that he could quit immediately on October 23, 1990 and would not have to return to the Mutual Savings office again. At the conclusion of the aforementioned audit, Mr. Herring completed a final Audit Report on Respondent. That Audit Report stated that Respondent's bookkeeping was poor and that Respondent had a discrepancy on his account. On or about January 16, 1991, Ken Jordan, an assistant Vice-President of Mutual Savings, notified Respondent that he had a deficiency on his agent's account. After applying a deposit on Respondent's bond account to the deficiency of $1,655.34, the company felt Respondent owed it $1,250.28. The letter constituted a demand for payment of that amount. Although in his answers to Requests for Admissions Respondent denied receiving the aforementioned demand letter, he admitted at formal hearing that he had, indeed, received the letter and asserted that he just had not remembered receiving it when he answered the Requests for Admissions. On September 24, 1992, Respondent wrote to Jim Mott, an employee of Petitioner agency who was charged with investigating Respondent's activities as an insurance agent with Mutual Savings. In that letter, Respondent stated that he had offered to repay monies owed to Mutual Savings. On January 26, 1993, John Parker, Vice President and Treasurer of Mutual Savings, executed an affidavit which stated that Respondent had a deficiency of $1,655.34 on his account and that after applying all credits due Respondent, Respondent owed Mutual Savings $1,250.28. Respondent testified that on October 23 or 24, 1990 he had made an oral offer to Mr. Herring to repay the $1,250.28, but that he had not paid the money back because Mr. Herring demanded that the full amount be tendered by cash or cashier's check. Mr. Herring flatly denied there ever had been such a conversation, although he guessed Respondent may have offered to have his last check and bond applied against the amount that Respondent was short. Mr. Herring also testified that he did not know the full amount of the shortage as of October 23-24, 1990 so he could not have demanded any full amount then. Upon these issues, Mr. Herring is the more credible witness. As of the May 13, 1994 formal hearing, Respondent had made no effort to repay the money. Respondent admitted that there was money short on his account, but maintained that he had not stolen the money himself. He also contended that Mr. Herring's audit showing that his accounts were short by $1,655.34 was inaccurate. However, Respondent could not demonstrate that the audit was inaccurate. Respondent speculated in retrospect, that the total shortage amount of $1,655.34 had been stolen from his car during the 1990 car burglary, because in 1990 he had only estimated that $1,200.00 was the amount stolen from his car. He admitted that he had not converted the cash he had collected to checks or money orders as required by his contract and further admitted that he had not counted how much money he had, in fact, collected during the week of October 22, 1990 from Thursday through the weekend until the night when his car burglary had occurred. Respondent also conceded that he had always known that he was liable to Mutual Savings, under the terms of his contract, for the entire amount of the theft of cash, whatever that amount might have been, even if he was blameless in the burglary.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Insurance enter a final order finding Respondent guilty of violating Sections 626.561(1), 626.611(7), and 626.611(10), and 626.621(2), and 626.621(4) F.S. [1990], and suspending Respondent's license as an insurance agent in this state for a period of twelve months. RECOMMENDED this 19th day of July, 1994, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The De Soto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1994. APPENDIX TO RECOMMENDED ORDER 92-2060 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: Accepted Accepted as a "given"; not used. 3-4 Accepted, except that the date on the contract has been substituted. 5-8 Accepted as modified to more accurately reflect the record as a whole. 9-10 Accepted 11 Accepted as modified to more accurately reflect the record as a whole. 12-16 Accepted 17 Rejected as subordinate and immaterial. Covered in part in the conclusions of law on penalty. Respondent's PFOF: 1 Covered in Finding of Fact 6 and 15. 2-5 Rejected as legal argument, not a proposed finding of fact. However, the general topics are covered in Findings of Fact 5, 11, 12, 14, and 15 and in the conclusions of law. COPIES FURNISHED: John A. Dickson Department of Insurance and Treasurer 646-H Larson Building Tallahassee, FL 32399-0300 Vernal C. Aldridge Post Office Box 555002 Orlando, FL 32855 Tom Gallagher, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, Esquire Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, FL 32399-0300
The Issue The issue is whether Mr. Powell should be disciplined for irregularities in the handling of an escrow deposit by a real estate firm for which he was the qualifying broker.
Findings Of Fact The Respondent, Willie Powell, was at all relevant times a licensed real estate broker in the State of Florida, holding license number 0070494. Mr. Powell was the sole qualifying broker of Future Investments & Development II Co., Inc., trading as ERA Thompkins and Saunders Realty Company (hereafter, T & S), 2734 N.W. 183rd Street, Suite 206, Miami, Florida 33056. On or about November 12, 1990, Guillermo Castillo, a licensed real estate broker for Emerald Enterprises, Inc., received a listing agreement from Horace B. Miller to sell residential property (a duplex) owned by Miller located at 2331 N.W. 103rd Street, Miami, Florida. The property was listed with the Multiple Listing Service. On or about February 27 or 28, 1991, Mr. Castillo received a telephone call from Willie J. Thompkins of T & S saying he wanted to show the Miller property to a prospective buyer. On or about February 28, 1991, Mr. Castillo received through the mail slot at his office a written offer from George R. Howell of Dorchester, Massachusetts, to buy the Miller property, with a business card of Jerry Saunders of T & S. On or about March 6, 1991, Guillermo Castillo met with Horace Miller to review the Howell offer. At Miller's request, Castillo made some changes to the contract to reflect that Miller was selling the duplex in "as is" condition. Miller signed the contract and initialed the changes, and Mr. Castillo signed the contract on behalf of Emerald Enterprises, and called Willie J. Thompkins to tell him the contract had been signed. The next day, Mr. Castillo went to the office of T & S and dropped off the contract for the buyer to consider the seller's changes. A day or two later, a representative of T & S telephoned Guillermo Castillo and told Mr. Castillo that the buyer had accepted the seller's changes to the contract; Mr. Castillo then notified Miller. Mr. Castillo later received from T & S the signed contract with Mr. Miller's changes initialed by Mr. Howell. The contract was also signed by Mr. Thompkins of T & S. The contract called for a $1,000 deposit to be held in escrow by T & S (Exhibit 5, Paragraph IIa). Guillermo Castillo contacted T & S to check on the progress of the sale. He learned that J.P. Mortgage was handling the buyer's mortgage loan application. Castillo contacted J.P. Mortgage and was told that the loan was proceeding normally. After the contractual closing date of April 29, 1991, had passed without the closing taking place, Castillo contracted J.P. Mortgage again, but was told that they were no longer processing the loan. Castillo requested that J.P. Mortgage send him a letter to that effect, and he received a letter dated May 2, 1991, stating that J.P. Mortgage was withdrawing as the lender because the buyer failed to return the mortgage loan application. Castillo informed Horace Miller of the situation and Miller instructed Castillo to write to T & S making a claim to the buyer's deposit under the contract of sale. On May 4, 1991, Castillo sent a letter to T & S claiming the deposit for the seller. Paragraph Q of the contract provided for the seller to retain the buyer's deposit as liquidated damages if the buyer failed to perform the contract. On or about May 9, 1991, Guillermo Castillo received from Mr. Thompkins, the manger of T & S, a letter dated May 1, 1991, but postmarked May 6, 1991, ". . . requesting that the . . . file be cancelled" due to ". . . communication problems with . . . Mr. Howell," and citing unsuccessful attempts to contact Howell by telephone and by mail. When Castillo received that letter he contacted T & S to point out the seriousness of the matter and to press for forfeiture of the buyer's deposit. On May 9, 1991, Castillo received a telefax from Mr. Thompkins of T & S stating that the Howell deposit check had been returned for insufficient funds and attaching a copy of the returned check. Prior to his receipt of this telefax, Castillo had not taken any independent steps to verify whether T & S had actually received the Howell deposit. He had relied on the contract, which had been executed by a licensed salesman and believed he did not require further verification that the escrow deposit had been made. Neither Mr. Castillo nor Mr. Miller dealt with the Respondent, Mr. Powell, at any time concerning the sale of the Miller property. T & S received George Howell's $1,000 deposit in the form of a check on March 4, 1991, drawn on a Massachusetts bank and deposited it in its account with First Union National Bank which was used as the escrow account, account number 15462242336, on March 5, 1991. The check was charged back to the account twice, on March 11, 1991, and on March 26, 1991. Mr. Powell was a signatory on that escrow account. After Guillermo Castillo received the May 9, 1991, telefax, he notified Horace Miller. Mr. Miller had not taken any steps on his own to verify whether T & S had received the deposit because he had confidence in his broker to let him know right away if there were any problems with the sale. By May 9, 1991, Horace Miller had already incurred expenses preparing the property for closing, and had lost rent by terminating a tenancy in the property. Because the transaction never closed, Mr. Miller sustained financial damage, some of which he might have avoided if he had been notified earlier of the buyer's dishonored escrow deposit check. On or about May 28, 1991, Miller filed a complaint with the Department of Professional Regulation, which Sidney Miller investigated. He found that the person introduced to him during his investigation at T & S as Willie Powell was not actually the Respondent. In March 1991, Mr. Powell had not seen the bank statements for the T & S escrow account for several months, and had not signed the written monthly escrow account reconciliation statement for the month of October 1990 or for any subsequent month. Mr. Powell was serving as the qualifying broker of T & S for a salary of $75 per month and no commissions. He was not active in the management of the firm. He would come to the office of T & S approximately three days per week to check files and sign listing agreements, and he would call in to see if there were any problems, messages or documents to sign. He essentially loaned his brokers' license to those who operated T & S as an accommodation because he had known the Thompkins family for 25 years. Mr. Powell argues in his proposed order that "the adequacy of [Mr. Powell's] monthly reconciliations were impeded by frauds perpetrated upon him by persons at [T & S]" (PRO at page 9, paragraph 5). It is obvious that there were problems at T & S, since a person there misrepresented himself to the Department's investigator as Mr. Powell. The full extent of the misconduct there is unclear. There is no proof in this record that salespersons at T & S had fabricated escrow account statements for Mr. Powell. Had Mr. Powell proven that he performed monthly reconciliations with what turned out to be falsified records of T & S, his argument might be well taken. The record, unfortunately, shows that no reconciliations were done. Had Mr. Powell done them, the problem here should have been uncovered.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued finding Willie Powell guilty of violating Section 475.25(1)(b), Florida Statutes, finding him not guilty of violating Section 475.25(1)(d), Florida Statutes, and taking the following disciplinary action against him: Issuance of a reprimand. Imposition of an administrative fine in the amount of $1,000 to be paid within 30 days of the date of the final order adopting the recommended order. Placement of the license of Mr. Powell on probation for a period of one year beginning on the date of the final order and providing that during that period he shall provide satisfactory evidence to the Florida Department of Professional Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completion a 30-hour postlicensure education course in real estate brokerage management, in addition to any other education required of him to remain current and active as a real estate broker in the State of Florida, and that he be required to submit to the Commission during that year his monthly trust account reconciliations. Cf. Rule 21V-24.002(3)(i), Florida Administrative Code, on penalties for violation of Rule 21V-14.012(2), Florida Administrative Code. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of July 1992. WILLIAM R. DORSEY, JR. 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 day of July 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-0192 Rulings on Findings proposed by the Commission: Adopted in Findings 1 and 2. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 12. Adopted in Finding 13. Adopted in Finding 11. Adopted in Finding 15. Rulings on Findings proposed by Mr. Powell: Adopted in Finding 1 with the exception of the license number. Adopted in Finding 3. Adopted in Finding 2. Adopted in Finding 4. Rejected as unnecessary. Adopted in Finding 5. Adopted in Finding 4. Adopted in Finding 6. Generally adopted in Finding 6. Implicit in Finding 10. Adopted in Finding 6. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 10. Rejected as subordinate to Finding 10. Adopted in Finding 13. Rejected as unnecessary, the reconciliation was not one done shortly following the month of March reconciling the account for March 1991. It was done during the investigation conducted by Mr. Miller and took place between approximately June 20 and July 10, 1991. Adopted in Finding 15. Rejected as unnecessary. Adopted in Finding 14. Rejected as unnecessary, or subordinate to Finding 10. Rejected as unnecessary. Rejected as unnecessary. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Professional Regulation Suite N-607 401 Northwest 2nd Avenue Miami, Florida 33128 Harold M. Braxton, Esquire Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact At all times material hereto Respondent Marvin M. Kornicki has been a licensed real estate broker in the State of Florida, having been issued License Nos. 0265344 and 0252335. The last license issued was as a broker for Waterway Properties, Inc., t/a Waterway Properties. At all times material hereto, Respondent Waterway Properties, Inc., t/a Waterway Properties, has been a corporation registered as a real estate broker in the State of Florida, having been issued License No. 0265344. At all times material hereto, Respondent Kornicki was licensed and operating as the qualifying broker and an officer of Respondent Waterway Properties, Inc. On January 7, 1990, Respondents solicited and obtained an offer in the amount of $155,000 from Alda Tedeschi and John Tocchio, buyers, to purchase real property, to-wit: Unit 422 at Mariner Village Garden Condominium, Aventura, Florida, from Arthur Goldstein and Myra Goldstein, sellers. The buyers' offer reflected a $1,000 deposit to be held in trust by the Respondent Waterway Properties, Inc. The offer reflected that if the offer was not executed by and delivered to all parties, or fact of execution communicated in writing between the parties, on or before January 10, 1990, the deposit would be returned to the buyers and the offer would be withdrawn. The offer also reflected that "time is of the essence." On January 8, 1990, Respondents sent the buyers' offer to the sellers in New Jersey by air express. On January 10, 1990, the sellers signed the offer but made it a counteroffer by requiring the buyers to furnish an additional deposit of $14,500 by January 12, 1990, and requiring the buyers to sign a condominium rider and an agency disclosure form. The sellers returned the counteroffer with condominium rider and agency disclosure form to the Respondents. On January 12, 1990, Respondents sent the counteroffer, condominium rider, and agency disclosure form, together with a letter dated January 11, 1990, to the buyers for the buyers' initials and signatures. Although the buyers could not have received the counteroffer until after its expiration date, they advised Respondents by telephone that they had in fact initialed the counteroffer and mailed it back to Respondents. Respondents never received from the buyers that accepted counteroffer. The buyers subsequently verbally demanded the return of their $1,000 deposit, but Respondents wrote to the buyers on February 9, 1990, advising the buyers that they were in default. On February 8, 1990, Respondents had already disbursed the $1,000 deposit to Respondents' operating account since the sellers had told the Respondents to use the deposit to cover the costs incurred advertising the sellers' property. Since he was uncertain as to whether he had "conflicting demands upon an escrow deposit" Respondent Kornicki telephoned the Florida Real Estate Commission and discussed the matter with one of the Commission's attorneys. Because Respondent Kornicki believed that the buyers were "in default," Respondents failed to notify the Florida Real Estate Commission in writing that they had received conflicting demands. No explanation was offered as to why Respondent Kornicki believed the buyers were in default when the counteroffer could not have been signed by the buyers prior to its expiration and when Respondent Kornicki had never seen a fully executed document. Further, no explanation was offered as to why the sellers believed they were entitled to the money. Since that transaction, Respondents have experienced other transactions where conflicting demands were made. In those subsequent instances, they have timely notified the Florida Real Estate Commission in writing as to those conflicting demands. On June 18, 1990, Petitioner's investigator conducted an office inspection and escrow/trust account audit of Respondents' office and escrow/trust account. That audit revealed that Respondents wrote a trust account check on September 1, 1989, in the amount of $369.15, which was returned on October 3, 1989, for insufficient funds. A second trust account check in the amount of $800 was also returned for insufficient funds on October 3, 1989. Respondents had received rental monies from a tenant by check. Respondents had written checks out of those monies for the mortgage payment on the rental property, not knowing that the tenant's check would fail to clear. The worthless check written by the tenant caused these checks written by Respondents to be returned for insufficient funds. Respondents have changed their office policies so that they no longer accept checks from tenants except before tenants move into rental properties and the checks must clear before the tenants are allowed to take possession of the leased premises.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: Finding Respondent Kornicki guilty of Counts I, III, V, VII, IX, and Finding Respondent Waterway Properties, Inc., guilty of Counts II, IV, VI, VIII, X, and XII; Dismissing Counts XIII and XIV; Ordering Respondent Marvin M. Kornicki to pay a fine of $1,000 to the Division of Real Estate within 60 days and revoking Respondents' licenses should such fine not be timely paid; Placing Respondents on probation for a period of one year if the fine is timely paid; Requiring Respondent Kornicki to complete and provide satisfactory evidence of having completed 60 hours of approved real estate post-licensure education for brokers, 30 hours of which shall include the real estate broker management course, during the probationary period; Establishing terms for the probationary period except that such probationary terms shall not require Respondent Kornicki to retake any state licensure examinations and Requiring Respondent Kornicki to appear before the Commission at the last meeting of the Commission preceding the termination of Respondents' probation. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 13th day of February, 1991. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 1991. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 90-5863 Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed findings of fact numbered 2-4, 6-14, and 16-19 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 5 has been rejected as being unnecessary for determination of the issues herein. Petitioner's proposed finding of fact numbered 15 has been rejected as not being supported by the weight of the credible evidence in this cause. COPIES FURNISHED: Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McCray, Esquire Department of Professional Regulation Legal Division 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Marvin M. Kornicki Waterway Properties, Inc. 16560 Biscayne Boulevard North Miami Beach, Florida 33160
The Issue Whether Respondents violated provisions of Part 1 of Chapter 475, Florida Statutes, and Florida Administrative Code, Subpart 61J2.
Findings Of Fact The Florida Department of Business and Professional Regulation, Division of Real Estate, and the Florida Real Estate Commission, regulate the sale of real estate in the State of Florida. The Department issues licenses to applicants certified to be qualified by the Florida Real Estate Commission. Ms. Wilf is currently licensed with the Department as a qualifying broker with Sharon L. Wilf Paradise Properties, Inc. She holds Broker License No. 0547485. Sharon L. Wilf Paradise Properties, Inc., is a licensed brokerage corporation located at 9535 Highway 98 East, Destin, Florida 32550. At all times relevant Ms. Wilf had substantial if not exclusive control over Sharon L. Wilf Paradise Properties, Inc. Pursuant to a complaint on September 7, 2000, the Department detailed Diana Woods to conduct an office inspection of Ms. Wilf's real estate practice. Ms. Woods contacted Ms. Wilf telephonically in December of 2000. Ms. Wilf said that she would be available in February 22, 2001, for an audit and inspection of Respondents' records. At the appointed time, however, Ms. Wilf was in Texas. On April 5, 2001, Ms. Wilf told Ms. Woods she was still in Texas. A visit was then scheduled for April 12, 2001, but at the appointed time Ms. Wilf was not there. Ms. Woods tried for April 18, 2001, but Ms. Wilf said that she was really busy and that her books were off-site and in the custody of her bookkeeper on that date. Ms. Wilf also asserted that her mother had suffered a stroke and asked for another date. Ms. Wilf agreed that Ms. Woods could inspect on May 8, 2001. On Sunday, May 6, 2001, Ms. Wilf called Ms. Woods to tell her that she was leaving for Texas and Louisiana on May 7, 2001. Ms. Woods went to Ms. Wilf's office on May 8, 2001, and no one was there. In a letter dated May 11, 2001, Ms. Woods gave Ms. Wilf three dates to be available for an inspection and demanded that she choose one. Ms. Wilf agreed to May 24, 2001. Ms. Wilf was present on that date when Ms. Woods arrived. However, Ms. Wilf's books and records were disorganized and incomplete. Ms. Woods returned on May 29, 2001, and examined Ms. Wilf's books and records. As a result of the inspection it was determined that as of May 29, 2001, Ms. Wilf's trust account showed a liability of $57,000 but there was $58,164.63 present in the account. This meant that she had an overage in the account of $1,164.63. Ms. Wilf could not provide an explanation as to why the account was out of balance. A review of Ms. Wilf's Monthly Reconciliation Statement Real Estate Trust Account (Reconciliation Statement) for the period February 1, 2000, to February 29, 2000, indicated that her trust account was short $14,096.40. Ms. Wilf explained this by saying she had mistakenly written two commission checks on that account. No corrective action was indicated. The Reconciliation Statement for the period April 1, 2000, to April 28, 2000, revealed a shortage of $26,381.20, in her trust account. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period April 29, 2000, to May 31, 2000, revealed a shortage of $137.28. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period July 1, 2000, to July 31, 2000, revealed a shortage of $8,492.58. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period September 1, 2000, to September 30, 2000, revealed a shortage of $5,443.05. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period October 1, 2000, to October 31, 2000, revealed a shortage of $2,407.71. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period November 1, 2000, to November 30, 2000, revealed a shortage of $1,828.96. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2001, to March 31, 2001, revealed an overage of $7,827.74. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2000, to March 31, 2000, reflected a total shortage of $19,150.16, on the second page. This figure had a line drawn through it. On the third page, the document indicates an overage in an amount that cannot be determined due to handwriting that is indecipherable. It may be $1,847, or $1,849 and some cents. There was no explanation for the figures provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2000, to June 30, 2000, revealed an overage of $19,712.72. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period December 31, 2000, to January 31, 2001, revealed an overage of $3,452.13. The reason for the overage was, "? overpaid commission." No corrective action was indicated. The Reconciliation Statement for the period February 1, 2001, to February 28, 2001, revealed an overage of $9,556.31. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period May 1, 2001, to May 31, 2001, revealed an overage of $1,161.62. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2001, to June 30, 2001, revealed an overage of $1,158.63. On the explanation page Ms. Wilf cited as a reason, "Overage from May 25, 2001 audit," and for corrective action taken, stated, "Plan to make correction July." The Reconciliation Statement for the period January 1, 2002, to January 31, 2002, revealed a shortage of $1,551.88. On the explanation page Ms. Wilf cited as a reason, "Force debit from Nov. 19-$6541.63-11-45 acct maint," and for corrective action taken, stated, "The force debit should have come from GOA acct. maint shouldn't be deducted bank to correct." The Reconciliation Statement for the period March 1, 2002, to March 29, 2002, revealed a shortage of $2,544.43. On the explanation page Ms. Wilf cited as a reason, "Debit from bank still not done," and for corrective action taken, stated, "Bank to correc-had Tracy call. The $10,000 from Embry-issued stop payment-see bank statement." The Reconciliation Statement for the period March 30, 2002, to April 30, 2002, revealed a shortage of $4,331.43. On the explanation page Ms. Wilf cited as a reason, "Same force debit-unauthorized debit of 10,000 on 4/4/02." No corrective action was indicated. The Reconciliation Statement for the period May 1, 2002, to May 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "same." No corrective action was indicated. The Reconciliation Statement for the period June 1, 2002, to June 30, 2002, revealed a shortage of $1,555.43. The reason given for the shortage was, "Same. Should not have $2.00 fee." No corrective action was indicated. The Reconciliation Statement for the period June 29, 2002, to July 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "Same." A Final Default Judgment in Favor of Plaintiff Anchors, Foster, McInnis & Keeff, P.A., and Against Sharon L. Wilf, Paradise Properties, Inc., in the amount of $12,951.33 was filed with the Clerk of Court of Okaloosa County on September 21, 2001. On November 19, 2001, a Writ of Garnishment was entered by the clerk for the identical amount, indicating that the judgment was unsatisfied at that time. Compass Bank debit memos indicate that some of the debt, in the amounts of $25, $75, and $6,591.63, on November 19, 2001, was extracted from Ms. Wilf's account pursuant to the garnishment. In a document entitled "vacant land contract," the sellers listed on the contract, Morris Lou Sobh and Georgia Sobh, sold property to Montana Land Company. James E. Clausel was the person who was authorized to sign for Montana Land Company. The signatures of the two sellers were cut from another document and pasted onto the "vacant land contract." Mr. Clausel was unaware that the signatures were not actual signatures. Ms. Woods contacted the Sobhs' on November 2, 2002, and they related to her that Ms. Wilf was not authorized to supply their signatures. Ms. Woods' testimony is hearsay which is insufficient to prove that the signatures supplied were not authorized. Moreover, Ms. Wilf stated under oath that she talked to the Sobhs' at or about the time the signatures were supplied, and she stated that they authorized her to supply the signatures. The evidence presented by the Department is insufficient to overcome Ms. Wilf's first-hand testimony. The Department provided Ms. Wilf's check no. 2459, in the amount of $17,400, payable to Lutz Brockstadt, and asserted that this represented the payment of a commission to a person not having a real estate license. However, Ms. Wilf testified that this represented rental revenue. Moreover, an Internal Revenue Service 1099-MISC indicates that the funds represented rental income. The evidence presented by the Department fails to meet the required burden of proof by clear and convincing evidence. Accordingly, it is not found that Ms. Wilf paid a commission to a person not holding a real estate license. The Department alleged that Ms. Wilf transferred $10,000 from her escrow account to her operating account on April 4, 2002. The evidence tending to prove this included a bank document dated April 4, 2002, reflecting the charge. The word "Tracy" is on the document, which indicates that it was accomplished by Tracy, whose full name is Tracy Tubb, and who was Ms. Wilf's bookkeeper. Whether or not Ms. Wilf authorized the act is unknown, although telephone records indicate long distance telephone calls were made to Ft. Walton on April 3 and 4, 2002, by Ms. Wilf. Ms. Tubb told Ms. Woods that she effected the transfer on Ms. Wilf's instructions. The evidence, on the whole, is insufficient to demonstrate that $10,000 was actually transferred by or at the direction of Ms. Wilf.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licenses of Respondents Sharon L. Wilf and Sharon L. Wilf Paradise Properties, Inc. be revoked and that a $3,000 civil penalty be assessed jointly and severally against Respondents. DONE AND ENTERED this 8th day of January, 2004, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 8th day of January, 2004. COPIES FURNISHED: James P. Harwood, Esquire Department of Business and Professional Regulation Division of Real Estate Hurston Building, North Tower, Suite N802 400 West Robinson Street Orlando, Florida 32801 Sharon L. Wilf 9535 Highway 98, East Destin, Florida 32550 Jason Steele, Director Division of Real Estate Department of Business and Professional Regulation Hurston Building, North Tower Suite N802 400 West Robinson Street Orlando, Florida 32801 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
