Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Lawrence R. Dennis is now and was at all times pertinent hereto a licensed real estate broker in the State of Florida having been issued license number 0148366 in accordance with Chapter 475, Florida Statutes. The last license issued was a broker, c/o Dennis & Associates, Inc., 4141 North Miami Avenue, #300, Miami, Florida 33127-2847. Respondent, Dennis & Associates, Inc., is now and was at all times pertinent hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0236428 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 4141 North Miami Avenue, #300, Miami, Florida 33127-2847. Sometime in September or October 1990 Janet Carter saw an advertisement in the Miami Times newspaper for a home for sale by Dennis and Associates, Inc. Mrs. Carter called the telephone number listed in the ad and talked with Mr. Dennis. After speaking with Mr. Dennis about the advertised property Mrs. Carter and her husband viewed the property and ultimately executed a contract to purchase the property which was owned by Dennis and Associates, Inc. Mrs. Carter knew that Mr. Dennis was a licensed real estate broker and felt that she was dealing with him in his capacity as a broker. Mrs. Carter understood that Mr. Dennis's corporation (Dennis & Associates, Inc.) was the owner and seller of the property. Mr. Dennis did not live in the home that the Carters were interested in buying and at all times the Carters were under the assumption that they were negotiating the purchase of a home through a licensed broker. There was, however, insufficient evidence to establish that Mr. Dennis misled the Carters into believing that he was acting in any capacity other than as the president of the corporation that owned the subject property. On or about October 22, 1990, Ms. Carter and her husband, Ruben, executed a Purchase and Sale Contract and Receipt for Deposit for property located at 2001 Northwest 53rd Street, Miami, Florida (Carter contract). The seller of the property was Dennis and Associates, Inc. In the first paragraph of the Carter contract, the receipt of the sum of $500.00 from the buyers as a deposit on account of the purchase price is acknowledged by the seller. The form language in that paragraph referring to the deposit being held in escrow is crossed out. The crossed out language is not signed or initialed by any of the parties to the transaction. 2/ On the second page of the Carter contract, the following provision was not altered by the parties: "Deposit check will be deposited, and the funds held in an escrow account until the sale has been closed." The $500.00 deposit was not paid by the Carters until November 19, 1990. Mrs. Carter believed the earnest money deposit was to be held in an escrow account. After signing the Purchase and Sale Contract and Receipt for Deposit the Carters took the contract to attorney Keith Levarity who prepared a two page Modification of Contract and attached it to the original contract. The Modification of Contract allowed the Carters, at their expense, to obtain a roof and termite inspection. The parties to the transaction agreed to that modification of the contract. Another provision in the Modification of Contract agreement provided that the earnest money deposit in the amount of $500.00 would be held in Mr. Levarity's trust account. Respondents did not agree to that modification and that provision was deleted from the Modification of Contract agreement. The Carters agreed to allow Mr. Dennis to hold the earnest money deposit in his escrow account and that portion of the Modification of Contract that referred to Mr. Levarity holding the earnest money deposit was crossed out, initialed by the Carters and by Mr. Dennis, and dated November 19, 1990. The Modification of Contract also provided that if defects were noted by the inspections, repairs to the house would be made by the sellers prior to the closing of the transaction. On November 19, 1990, Janet Carter gave Respondent Lawrence Dennis check number 541 in the amount of $500.00 as an earnest money deposit for the purchase of the property located at 2001 Northwest 53rd Street, Miami, Florida. The transaction never closed because certain repairs to the property were never made by the Respondents as agreed. On January 14, 1991, Mr. and Mrs. Carter advised Mr. Dennis by letter that they wished to cancel their contract and wanted a full refund of the $500.00 deposit. In addition to the letter of January 14, 1991, Mrs. Carter verbally told Mr. Dennis that the contract was cancelled and that she wanted her $500.00 earnest money deposit refunded. In December 1990, Respondents ordered a roof inspection to determine the extent of the repairs that would be needed. This inspection cost Respondents the sum of $50.00. Under the terms of the Carter contract as modified, the Respondents were to bear the cost of paying for that roof inspection. The Carters never ordered a roof inspection and were not, under the terms of their written contract, obligated to pay for the roof inspection ordered by Mr. Dennis. On or about February 25, 1991, Janet and Ruben Carter signed a release on deposit receipt provided by Mr. Dennis. The release on deposit provided that Mr. Dennis would return $450.00 of the $500.00 earnest money deposit made by the Carters. Mr. Dennis insisted on retaining the sum of $50.00 to pay for the roof inspection that he had ordered. Although the Carters believed they were entitled to the return of all of their earnest money deposit, they agreed to accept the sum of $450.00 on the advice of their attorney. On or about March 8, 1991, Janet Carter filed a complaint against Respondents with the Department of Professional Regulation. As of the time of the formal hearing, the Respondents had not repaid the Carters any portion of the $500.00 earnest money deposit they had made. Kenneth George Rehm is an experienced real estate investigator who had been employed by the Department of Professional Regulation for the ten years preceding the formal hearing. In March or April of 1991 Mr. Rehm went to the registered location of the office of Respondents to talk with Mr. Dennis about the complaint filed with the Department of Professional Regulation by Mrs. Carter. There was no sign indicating that the premises was a real estate office or that Lawrence Dennis was the broker of a real estate office either on the primary entry to the office or on the lobby directory. When Mr. Rehm brought the lack of a proper sign to Mr. Dennis's attention he put up a piece of paper with his name and the name of the company. Respondents established that at one time they had signs on the outside of Mr. Dennis's office suite and on the lobby directory, but that both signs had been stolen. It was not established when the thefts occurred or whether these thefts were the reason there were no signs in March or April 1991. Respondents had replaced their signs by the time of the formal hearing. Mr. Rehm interviewed Mr. Dennis about the Carter transaction on April 8, 1991. When Mr. Rehm asked to review the escrow account, Mr. Dennis told him that the Respondents did not have an escrow account and that, consequently, the Carter deposit was not being held in escrow. When informed by Respondent that there was no escrow account Mr. Rehm asked to review the operating account. Mr. Dennis refused to permit Mr. Rehm review of the operating account. Mr. Dennis telephoned Frederick H. Wilsen, Petitioner's Chief Staff Attorney, and inquired as to whether he had to give the operating account records to Mr. Rehm. After talking with Mr. Wilsen, Mr. Dennis agreed to allow Mr. Rehm review of the records for the operating account. On April 9, 1991, Mr. Rehm prepared a subpoena duces tecum directing Mr. Dennis as broker for Dennis and Associates, Inc., to produce at Petitioner's offices in Miami on April 15, 1991, all monthly bank statements, bank deposit slips, and cancelled checks for operating accounts and/or escrow accounts for the period of April 1, 1990, to the time of service of the subpoena on April 9, 1991. During Mr. Rehm's initial interview of Mr. Dennis he was told by Mr. Dennis that he could bring the subpoena to Respondents's office the following day at approximately 10:00. Mr. Rehm attempted to serve the subpoena at that time but Mr. Dennis was not at the office. Mr. Rehm contacted Mr. Dennis who indicated he would be at his office at approximately noon. Mr. Rehm was at Respondents's office at noon and Mr. Dennis was not there. Mr. Rehm returned to Respondents's office a third time in the afternoon and successfully served the subpoena duces tecum on Mr. Dennis. Mr. Dennis came to Mr. Rehm's office on April 15, 1991, but did not produce all the documents outlined in the subpoena duces tecum. On April 15, 1991, Mr. Rehm asked Mr. Dennis to produce cancelled checks and a bank statement for March of 1991. Mr. Dennis never complied with that request. The request for these records was within the scope of the subpoena. In response to the subpoena, Mr. Dennis gave Mr. Rehm a copy of two of the monthly bank statements for an escrow account (account number 20300562106) in the name of Dennis and Associates, Inc., at Eagle National Bank. The monthly statement for the period ending November 30, 1989, reflected that an overdraft in the amount of $8.91 existed in the account resulting from a bank service charge. The monthly statement for the period ending January 10, 1990, reflected a zero balance. There was no evidence of any activity in the escrow account subsequent to January 10, 1990. Mr. Dennis asserted the position that he did not have to provide records for an escrow account because Respondents did not have an active escrow account. That position is rejected. The evidence establishes that Respondents had, as of January 10, 1990, an escrow account at Eagle National Bank, and there was no persuasive evidence that this account had ever been closed. The documentary evidence introduced in this proceeding establishes that, as of January 10, 1990, the escrow account had a zero balance, but it does not establish that the account was closed. Mr. Dennis's testimony that he had asked that the account be closed is insufficient to establish that the account was closed, nor did it establish that Respondents were relieved of their duty to provide documentation in response to the subpoena that would enable Mr. Rehm to either audit the escrow account or verify that the account had been closed. When Mr. Rehm discussed the Carter contract with Mr. Dennis in late March 1991, Mr. Dennis stated he would return $450.00 of the $500.00 earnest money deposit to the Carters in the first week of April 1991. As of the date of the formal hearing Respondents had not refunded any of the earnest money deposit to the Carters. On or about November 30, 1990, a Final Judgment in case #90-2559-SP020 in the County Court in and for Dade County, Florida, was entered against Respondent Lawrence R. Dennis d/b/a Dennis & Associates, Inc., in favor of Nathaniel A. Greenidge and Joycelyn B. Greenidge. The award of the Final Judgment was for the principal sum of $3,200.00, prejudgment interest of $44.80, costs of $70.50 and attorneys' fees of $200.00 for a total of $3,515.30. The Final Judgment obtained by the Greenidges was a result of Respondents's refusal to refund an earnest money deposit taken by Respondents in conjunction with a real estate transaction involving Respondents as the seller of the property. Respondents refused to honor said Final Judgment, so the Greenidges had to levy on the subject real property and set it for Sheriff's sale on April 3, 1991. In an effort to obtain the debt owed by Respondents, the Greenidges entered into an agreement to cancel the Sheriff's sale in exchange for receipt of $3,500.00 from a third party purchasing the property. The agreement set a closing on or before 30 days from the date of the agreement. Respondents did not timely pay the Greenidges. On or about March 27, 1992, Respondents paid the Greenidges approximately $3,000.00, which they accepted in satisfaction of the final judgment. On or about October 16, 1990, the Respondents were issued a letter of guidance from the Florida Real Estate Commission for a violation of Section 475.25(1)(d), Florida Statutes, and Rule 21V-10.032, Florida Administrative Code. On or about February 19, 1991, a Final Order was issued by the Florida Real Estate Commission in DOAH Case No. 90-5124 (DPR Case Nos. 0148366 and 0236428) incorporating a stipulation disciplining Respondent for breach of trust in a business transaction, failure to account and deliver a deposit and failure to notify the Florida Real Estate Commission of a deposit dispute. That proceeding pertained to dealings between Respondents and Gwendolyn King and Roxie Ann King. On or about August 26, 1991, Mr. Wilsen, sent a letter to Respondents in reply to a letter sent to Mr. Wilsen by Respondents on or about July 31, 1991. Mr. Wilsen's letter stated, in pertinent part: It is a matter of private agreement as to who will hold the deposit and where the account will be maintained. As the property owner, you may hold the funds so long as you have the mutual prior knowledge and consent of the parties you are dealing with in the transaction." The King, Greenidge, and Carter transactions all occurred prior to Respondents's July 31, 1991, letter to Mr. Wilsen. Mr. Dennis did not rely on Mr. Wilsen's reply in his dealings with the Kings, the Carters, or the Greenidges.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which adopts the findings of fact contained herein and which suspends the licensure of both Respondents for a period of one year and which assesses an administrative fine in the total amount of $500.00. DONE AND ORDERED this 9th day of July, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1992.
The Issue Whether either Respondent violated the provisions of chapter 475, Florida Statutes,1/ regulating real estate sales associates, as alleged in the administrative complaints, and if so, what sanctions are appropriate.
Findings Of Fact The Florida Real Estate Commission, created within the Department, is the entity charged with regulating real estate brokers, schools, and sales associates in the State of Florida. The Division of Real Estate is charged with providing all services to the commission under chapters 475 and 455, Florida Statutes, including recordkeeping services, examination services, investigative services, and legal services. In 2006, Ms. Linda Fiorello and Ms. Catherine Lichtman, associates at another brokerage, decided to open up their own real estate business, with each owning a fifty-percent share. They created Luxury Realty Partners, Inc. (“the corporation”), a licensed real estate corporation in the State of Florida. While Ms. Lichtman was initially the qualifying broker, she soon stepped down from that position and a series of other individuals served as brokers for the corporation. Neither Ms. Fiorello nor Ms. Lichtman was licensed as a real estate broker at any time relevant to the Administrative Complaints. The corporation sold, exchanged, or leased real property other than property which it owned and it was not an owner-developer. On April 23, 2010, Mr. Brian Davis was added as the sole officer and director of the corporation, and he became the qualifying broker. At all times material to the complaints, Ms. Fiorello and Ms. Lichtman were licensed as real estate sales associates in the State of Florida, Ms. Fiorello having been issued license number 659087 and Ms. Lichtman having been issued license number 3170761. They worked together at the corporation, nominally under the direction, control, and management of Mr. Davis. The corporation did not maintain an escrow account. Mr. Davis did not manage any of the corporation’s bank accounts. He was not a signatory on the operating account. He did not collect brokerage commissions or distribute them to sales associates. He testified he went into the office “maybe once, once or twice a month.” When he agreed to become the qualifying broker for the corporation, he did not even know all of the names of the agents he was supposed to be responsible for. Mr. Davis stated: Well, basically, I was just doing a favor and I was – I put my license there until one of the other two could get their Broker’s license. I was just really stepping in for a short term to – to fill the time frame until one of them could get their Brokerage license, and I didn’t go on any management or any other books or anything of that nature. As Ms. Patty Ashford, one of the sales associates testified, Mr. Davis was seldom in the office. Ms. Ashford would turn in her contracts to Ms. Fiorello or Ms. Lichtman, who would review them. Ms. Ashford testified that her commission checks were then paid by checks signed by Ms. Lichtman. In short, Mr. Davis effectively provided no direction, control, or management of the activities of the corporation or its sales associates. In December of 2009, Ms. Jennie Pollio was living at 10861 Royal Palm Boulevard in Coral Springs, Florida (the property), a Section 8 property that she had been renting from Mr. Jimmy Laventure for about nine years. The property was in foreclosure. Ms. Pollio thought that she might be able to buy the property. She consulted Ms. Victoria Guante, a real estate sales associate with Luxury Realty Partners, Inc. Ms. Pollio knew Ms. Guante because they both had sons who played baseball on the same team. Ms. Guante told Ms. Pollio to get $40,000.00 in cashier’s checks and put it in escrow with Luxury Realty Partners, Inc., so that she could make a strong offer and show that she really had the money. Although they were not produced as exhibits at hearing, Ms. Pollio testified that she signed a couple of different contracts for the property in early 2010. On or about April 29, 2010, Ms. Guante accompanied Ms. Pollio to the bank to get cashier’s checks. Ms. Pollio received five Bank of America cashier’s checks made out to “Luxury Partner Realty,” four in the amount of $9000.00, and one in the amount of $4000.00. Ms. Pollio understood that the property could be purchased for a total of $40,000.00, which included $37,000.00 for the property, and the balance in closing costs. The cashier’s checks were not given to a broker. Ms. Pollio gave the $40,000.00 to Ms. Fiorello as a deposit on the property when she met with her in the corporation office on State Road 7. Ms. Pollio made a copy of the cashier’s checks and Ms. Fiorello wrote a note on the bottom of the copy, “Received by Linda A. Fiorello for Luxury Escrow deposit on contract 10861 Royal Palm Blvd Coral Springs FL 33065” and gave it back to Ms. Pollio.2/ Although the payee name on the cashier’s checks was transposed, Ms. Pollio gave the checks to Ms. Fiorello as agent of the corporation as a deposit on the property, and Ms. Fiorello accepted the checks on behalf of the corporation for the same purpose. Ms. Fiorello did not advise Mr. Davis that the checks had been received. Instead, she deposited the checks in an account formerly belonging to Luxury Property Management, an entity unaffiliated with Luxury Realty Partners, Inc.3/ Luxury Property Management had never been a licensed real estate brokerage corporation, and was no longer in existence, as it had been dissolved. The account had never been properly closed. The account usually had a low balance. Just prior to the deposit of Ms. Pollio’s money, the balance was $10,415.15. Ms. Lichtman had no ownership or interest in Luxury Property Management, but she was aware of the account. The corporation did not have an escrow account, and the Luxury Property Management account was sometimes used to hold money “in escrow,” as Ms. Lichtman was aware. As he testified, Mr. Davis knew nothing about this account and did not authorize Ms. Fiorello to place Ms. Pollio’s deposit there. Ms. Fiorello’s contrary testimony that she told Mr. Davis of the transaction and had his authorization was not credible and is rejected. Ms. Guante was negotiating for the property on Ms. Pollio’s behalf. She testified: At that point the guy was asking (unintelligible) I think was sixty-five, and then we made the offer for $40,000.00. The guy came back and say “no,” and then we went back and make another offer for $50,000.00, and then by that time the guy still say “no.” And then her and I get into an argue because baseball game that don’t have nothing to do with the real estate and then she decided she don’t want me no more as her agent. Ms. Guante called Ms. Fiorello and told her that Ms. Pollio didn’t want to work with Ms. Guante anymore. Ms. Fiorello told Ms. Guante not to worry about it, that the corporation would handle the transaction for Ms. Pollio. On September 23, 2010, a check in the amount of $40,000.00 was written from the Luxury Property Management, LLC, account to Luxury Realty Partners. It is undisputed that the hand writing on the “amount” and “pay to the order of” lines on the check was that of Ms. Lichtman, while the signature on the check was that of Ms. Fiorello. This check, posted into the corporation’s operating account the same day, along with a check for $6000.00, left a balance of only $684.15 in the Luxury Property Management, LLC, account. The two sales associates gave completely different explanations for the check. Ms. Fiorello testified that she always left one or two signed checks locked in the office when she was out of town. She testified that only she and Ms. Lichtman had keys to the lock. Ms. Fiorello testified that without her knowledge, Ms. Lichtman had removed a signed check and filled in the top portion. She testified that although it was her account, she did not realize that the money had been removed until around May 2011, some eight months later.4/ On the other hand, Ms. Lichtman testified that on numerous occasions, the two associates would write out checks together, and that in this instance they discussed the transfer in connection with the opening of a Rapid Realty real estate office in New York which involved Ms. Fiorello’s son. Ms. Lichtman testified that she filled out the top portions of the check, and Ms. Fiorello then signed it. Ms. Lichtman testified that the $40,000.00 “represented monies coming back into Luxury Realty Partners from Rapid Realty.” Ms. Lichtman did not explain why funds from Rapid Realty to repay a loan from Luxury Realty Partners would have been deposited into the Luxury Property Management account, and records for the Luxury Property Management account do not reflect such deposits. On November 4, 2010, a little over a month later, Ms. Lichtman transferred $40,000.00 from the corporation operating account into an account for Chatty Cathy Enterprises, an account controlled by her, and inaccessible to Ms. Fiorello. Ms. Lichtman’s explanation for these transfers, that the $40,000.00 came from the New York real estate venture in repayment of a loan made from the corporation, was unpersuasive, and is rejected. First, the only documentary evidence of a loan made to the “start-up” was an unsigned half-page note dated April 30, 2010. That document indicated that an interest-free business loan in the amount of 25,000 would be made from the corporation to “Rapid Realty RVC and its owners” and that re- payment of the loan would be made in monthly payments to the corporation. No amount was specified for these payments. Similarly, there was no evidence of any repayment checks from Rapid Realty to Ms. Fiorello, Ms. Lichtman, or the corporation. A document dated November 5, 2010, purports to be a “formal release” of that loan. It states in part: The above stated note lists a dollar amount of $25,000 dollars which is inaccurate. The total balance of the loan was approximately $48,000 dollars that was loaned by Luxury Partners Realty (sic), Catherine A. Lichtman and Linda A. Fiorello. This is the formal dollar amount of the loan that is considered paid and satisfied in full. This release appears to be signed by Ms. Lichtman and Ms. Fiorello. Even assuming that the loan had been repaid in full by the New York venture (although no corporation account deposits indicate this), it is not credible that Ms. Lichtman believed she was personally entitled to a payment of $40,000.00 for repayment of a $48,000.00 loan made by the corporation. The spreadsheet of itemized expenses of the New York office and offered by Ms. Lichtman as proof of amounts loaned has no apparent correlation to a spreadsheet prepared by Ms. Lichtman purporting to show checks and cash amounts transferred to New York.5/ In January 2011, Ms. Teresa Ebech, the listing agent for the property with First United Realty, took another contract for the Royal Palm property to Ms. Pollio. This contract referenced a $40,000.00 deposit and listed “Luxury Property Mgt. Escrow” as the escrow. This contract indicated a total purchase price of $55,000.00, and called for a February 21, 2011, closing date. Ms. Pollio signed the contact. The closing did not occur. Ms. Pollio decided to stop trying to buy the property and get her money back. No other party ever acquired an interest or equity in the deposit. Ms. Pollio had difficulty getting in touch with Ms. Fiorello about getting her money back. When Ms. Pollio finally was able to ask Ms. Fiorello for a return of her deposit, Ms. Fiorello did not return it, but told Ms. Pollio that she should get it from Ms. Lichtman. On or about April 28, 2011, Ms. Pollio, with help from her friend, Ms. Joyce Watson, prepared a letter to cancel the contract. The letter noted that the $40,000.00 had been in escrow for over a year and stated that due to the inability of Luxury Realty Partners to close on the property, Ms. Pollio requested immediate return of the deposit. The letter was sent to Catherine Lichtman at the Luxury Realty Partners, Inc., address. Ms. Lichtman’s testimony that she never received the letter is discredited. Ms. Ashford, another real estate sales associate at the corporation, had never met Ms. Pollio, but was in the Luxury Realty Partners, Inc., office one day in May of 2011 when Ms. Pollio came in with her husband. Ms. Ashford testified: She came in with her husband pretty much screaming and yelling from the minute she stepped foot in the door. She was very angry, very upset. I looked at her and said, you know, Ma’am please calm down. She said I’m not calming down. She pointed at Cathy, she said she knows exactly why I’m f’in here. This has nothing to do with you. Ms. Lichtman asked Ms. Ashford to call her husband, which Ms. Ashford did, thinking this was unusual because he never had anything to do with what went on at the office. Ms. Pollio yelled at Ms. Lichtman, and Ms. Lichtman yelled back, each becoming more and more agitated. Ms. Lichtman then left the room and locked the door. The police were called, though Ms. Ashford was not sure if it was Ms. Pollio or her husband, or perhaps Ms. Lichtman’s husband, who called them. Ms. Ashford testified that when the police officer arrived, Ms. Lichtman lied and told him that her name was Victoria. The officer tried to calm both parties, and told them it was a civil matter. The police officer finally persuaded Ms. Pollio and her husband to leave. Ms. Ashford testified as follows about the conversation that took place between Ms. Lichtman and Ms. Ashford after Ms. Pollio left: Q What did you say? A I asked her point blank what the hell was going on and she responded. Q What did she respond? A That yes, she had her money. The money was-– Q When you said her money. What-–what are talking about? A She had Jennie’s money. Q She-- A It was a deal, a transaction. “She came into our office with cash coming out of her boobs and I don’t have to give it back.” Were her words. Q Did you tell Cathy that she had to return the money? A Yes, I did. I said “Cathy, its escrow money, it doesn’t matter where she got it from,” and Cathy went on about “it’s illegal she’s a dancer, she’s on Section 8. I’m going to report it to the IRS. She thinks she buying a f’in house.” Ms. Lichtman’s admission to Ms. Ashford after Ms. Pollio left showed that Ms. Lichtman knew that she had money in her possession that had been given by Ms. Pollio to buy a house. Ms. Ashford testified that she was upset, as an agent with the corporation, about what appeared to be going on. She and Ms. Fiorello met with Mr. Davis in April of 2011. Ms. Fiorello told Mr. Davis that Ms. Lichtman had stolen funds. Mr. Davis reviewed the January contract that Ms. Fiorello gave him, and concluded that it didn’t make much sense. He had not given any authorization to place escrow funds into the Luxury Property Management, LLC, account. He did not have access to that account or to any of the corporation’s operating accounts to determine if money was missing. After the meeting, Mr. Davis asked Ms. Lichtman what she knew about the accusation. Ms. Lichtman denied that she took any money from an escrow account. Mr. Davis called the Florida Real Estate Commission and reported the incident. At some point, Ms. Lichtman advised Ms. Pollio that the cancellation letter was not sufficient, and provided Ms. Pollio with a “Release and Cancellation of Contract for Sale and Purchase” form. Mr. Laventura signed the form in June 2011, and Ms. Pollio signed the form when she returned it to Ms. Lichtman at the Luxury Realty Partners, Inc., office. The form released Luxury Partner Realty from liability and indicated that the escrow agent should disburse all of the $40,000.00 deposit to Ms. Pollio. At the time of the final hearing, Ms. Pollio had yet to receive her $40,000.00 deposit back. The testimony and documentary evidence in this case clearly demonstrates a recurring and systematic disregard of the legal entities and procedures intended to provide structure and accountability to business and real estate transactions by both Ms. Fiorello and Ms. Lichtman. Ms. Fiorello and Ms. Lichtman employed a qualifying “broker” for the corporation, but intentionally assumed the responsibilities of that position themselves during the time relevant to the Administrative Complaints. In doing so, they each operated as a broker without being the holder of a valid and current active brokers’ license. No evidence was introduced at hearing to indicate that the professional license of either Ms. Fiorello or Ms. Lichtman has ever been previously subjected to discipline.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that final orders be entered by the Florida Real Estate Commission: Finding Linda Fiorello in violation of sections 475.25(1)(k), 475.25(1)(d), 475.42(1)(d), 475.42(1)(a), 475.25(1)(b), and 475.25(1)(a), Florida Statutes, as charged in the Amended Administrative Complaint, and imposing an administrative fine of $10,000.00, reasonable costs, and revocation of her license to practice real estate; and Finding Catherine A. Lichtman in violation of section 475.25(1)(d), Florida Statutes, as charged in the Administrative Complaint, and imposing an administrative fine of $1000.00, reasonable costs, and revocation of her license to practice real estate. DONE AND ENTERED this 11th day of June, 2015, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 2015.
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Respondent, George G. Walsh, is a licensed real estate broker in the State of Florida, holding license number 0117943. Mr. Walsh is the owner of and the qualifying broker for G. G. Jerry Walsh Real Estate, located in Panama city, Florida. In May 1989, Respondent was the acting broker for Howard Bilford of Miami, Florida. Mr. Bilford owned a five acre parcel of property located in Bay County, Florida. Around May 15, 1989, Tama and Paul Russ, through Mr. Walsh's office, entered into a contract for the purchase of Mr. Bilford's property. The purchase price of the property was $15,000. The Russ' gave Mr. Walsh a $500 binder for deposit in his escrow account. The $500 was placed in Respondent's escrow account. Simultaneous with the signing of the sales contract and deposit receipt agreement, Mr. Walsh also prepared an estimated closing cost statement. On that closing cost statement, Mr. Walsh estimated that a survey of the property would cost the Russ' $450. During this meeting, Mr. Walsh explained to the Russ' that, especially if a financial institution was involved in the financing of the property, there would be certain costs which they would probably have to pay up front. Part of those costs included a survey of the property. At about the same time, the Russ' made application for a loan to a credit union located in Panama City, Florida. At the time of the loan application, the loan officers Mrs. Stokes, prepared a closing cost statement estimating the loan closing costs which the Russ' would encounter. On the credit union's closing cost statement, the cost of a survey was estimated to be $150 to $200. Since it was the credit union that required the survey, the Russ' believed that that estimate was the more accurate. The Russ' simply could not afford a $500 survey. As part of the loan application, an appraisal of the property was required. The appraisal was ordered by the credit union on May 16, 1989, and was completed on May 31, 1989. Unfortunately, the property had been vandalized by unknown persons, and the mobile home which was on the property had suffered severe and substantial damage. The appraisal indicated that the real estate was worth $10,500. With such a low appraisal, the credit union would not lend the amount necessary to purchase the property at the negotiated price. In an effort to renegotiate the property's price, Tama Russ inspected the property and prepared a list of the items which would have to be repaired to make the mobile home liveable. At the same time, the Russ' placed no trespassing signs and pulled logs across the entry to the property. The Russ' also placed padlocks on the doors to the mobile home and removed the accumulated garbage inside the mobile home in an effort to secure the property. They made no other repairs to the property. On June 1, 1990, the Russ' told the loan officer to hold the loan application. At some point during this process, both Mr. Walsh and the Russ' became aware that the survey would cost a considerable amount more than had been expected. By using a favor with Mr. Walsingham of County Wide Surveying, Mr. Walsh obtained a survey price of $500 for the Russ'. In an effort to help the Russ' close on the property, Mr. Walsh contacted Mr. Bilford to see if he would agree to pay the $500 survey cost. Mr. Bilford so agreed, contingent on the closure of the transaction, and sent Mr. Walsh a check made out to County Wide Surveying in the amount of $500. At that point, the Russ' believed that they were no longer obligated to pay for the survey since Mr. Walsh told them that Mr. Bilford was to pay for the survey. On June 3, 1989, Mr. Bilford agreed to a renegotiated price of $10,500.00 on the property. Additionally the Russ' agreed to sign a ten year promissory note for $2,000 bearing 11% interest per annum. Since there were changes in the terms of the contract, the Russ' entered into a net contract with Mr. Bilford on June 3, 1989. The new contract expired on June 30, 1989. Around June 5, 1989, the Russ' learned that their credit had been preliminarily approved. However, such preliminary approval only indicated that the Russ' had sufficient income to proceed with the more costly loan underwriting requirements of the credit union. Such preliminary approval did not indicate that the loan would be finally approved by the financial institution. The preliminary approval was communicated to Mr. Walsh by Tama Russ. Ms. Russ intended the communication to mean that they had been preliminarily approved by the financial institution. Mr. Walsh in an abundance caution contacted Mrs. Stokes, the loan officer. Mrs. Stokes advised him that the Russ' credit had been preliminarily approved. She did not tell him that the loan had been finally approved. Through a misunderstanding of what Mrs. Stokes communicated to him, Mr. Walsh ordered the survey from County Wide Realty on June 7, 1989. There was no reliable evidence presented that the credit union had authorized him to order the survey. The credit union at no time during this process ordered the survey. Mr. Walsh testified that Ms. Russ told him to order the survey. Ms. Russ denies that she gave Mr. Walsh permission to order the survey. At best this evidence goes only to demonstrate Respondent's intent with regards to the actions he undertook in this case and removes this case from a Section 475.25(1)(b), Florida Statutes, violation. At some point Ms. Stokes left the employ of the credit union. On June 16, 1989, as part of her leaving, she unilaterally closed the Russ' loan application file and cancelled the loan application. Neither the Russ' nor Mr. Walsh were notified of the closure or the cancellation. The credit union's file fell into the void created between a change of employees. Because Mr. Walsh was unaware of Ms. Stokes' actions, Mr. Walsh, on July 13, 1989, after the expiration of the Russ' sales contract, contacted the credit union in order to obtain the loan closing package from the institution. The credit union had to hunt for the Russ' file. The credit union president called the Russ' about the loan and he was advised that they did not want the loan. The credit union's president then reviewed the loan file and noted that the Russ' had insufficient income to come up with the amount of the promissory note. He also thought the real estate constituted insufficient collateral for the loan. The loan application was officially denied on July 15, 1989. The Russ' were notified of the credit union's denial credit. The real estate transaction never closed. However, sometime after July 15, 1989, Mr. Walsh received the survey from County Wide. The survey indicates that the field work for the survey was completed on July 17, 1989, and that it was drawn on July 18, 1989. 1/ There was no reliable evidence which indicated any attempt had been made to cancel the survey. Sometime, after July 15, 1989, Tama Russ contacted Mr. Walsh in order to obtain the return of their $500 deposit. After many failed attempts to get the Russ' to voluntarily agree to pay for the cost of the survey, Mr. Walsh, around October, 1989, unilaterally paid the Russ' deposit to County Wide Realty. Mr. Walsh followed this course of action after speaking with some local FREC members who advised him that since FREC was swamped with deposit disputes that nothing would happen as long as he used his best judgment. The payment of the deposit to the surveyor, without prior authorization from the Ruse' violates Section 475.25(1)(d) and (k) Florida Statutes.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(d) and 475.25(1)(k), Florida Statutes, issuing a letter of reprimand to Respondent with instructions to immediately replace the Russ' trust deposit and forthwith submit the matter to the commission for an escrow disbursement order and levying a $250 fine. IT IS FURTHER RECOMMENDED that the portions of the Administrative Complaint alleging violation of Section 475.25(1)(b) be dismissed. DONE and ENTERED this 29th day of January, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 1991.
The Issue The issue in this case is whether Respondents are guilty of mishandling an escrow deposit.
Findings Of Fact Respondent Vu is and was at all material times a licensed real estate broker, holding Florida license number 0394778. He is and was at all material times the qualifying broker for Respondent American Homes and Investment Realty, Inc., which holds Florida license number 0250718. Respondent Vu owns Respondent American Homes. In 1990, Mr. and Mrs. Serge Delisfort contacted Respondents about purchasing a residence. The Delisforts eventually signed a contract to purchase a home and paid the $500 earnest money deposit to Respondents. Later learning that they would be liable to pay an annual homeowners' fee of $72, the Delisforts told Respondent Vu that they did not want to complete the purchase. The listing broker, which was not either Respondent, omitted mention of the homeowners' fee from the listing information supplied Respondents and the Delisforts. The sellers refused to release the deposit. Confronted with the dispute, Respondent Vu promptly requested an escrow disbursement order from the Florida Real Estate Commission on March 29, 1991. Due to the presence of a factual or legal dispute, the Florida Real Estate Commission informed Respondents, in a 47-word letter dated October 16, 1991, that it could not issue an escrow disbursement order. The October 16 letter warns Respondents to "immediately choose one of the other two alternatives available to you under ss. 475.25(1)(d), Florida Statutes, to settle this dispute, i.e., arbitration or a civil court." Instead, Respondents did nothing. The Delisforts periodically contacted Respondent Vu and asked if he could release their deposit. The sellers sold their house to another party and moved to Puerto Rico. The Delisforts contacted another broker and purchased a different house through the new broker. Eventually, the Delisforts contacted the Florida Real Estate Commission and asked its help in obtaining the deposit. An investigator for the Division of Real Estate interviewed Respondent Vu on March 1, 1994. Explaining the reason for the delay, Respondent Vu, possibly confused, stated that the buyers had left Orlando for awhile. In fact, the buyers had remained in Orlando. At the suggestion of the investigator, Respondent Vu contacted both parties, and they agreed to split the deposit equally. Respondent Vu prepared the paperwork, which the parties signed on March 11, 1994. At that time, Respondents paid each party $250. The Delisforts have since listed their home for sale by Respondents. While improperly holding the $500 deposit, Respondent Vu was preoccupied by the illnesses and deaths of his parents, who remained in Vietnam. Despite the possibility of trouble upon his return to Vietnam, Respondent Vu traveled to Vietnam at least once during this time to care for one or both of his parents. Respondents failed to implement timely the remedies established by law and identified by the Florida Real Estate Commission in its letter of October 26, 1991. Respondent Vu acted two and one-half years later, only after one of Petitioner's investigators contacted him. It is no excuse that the costs of arbitration or court would have consumed a large part of the amount in dispute. Confronted with that prospect, the sellers or the Delisforts would probably have settled the matter. If not, that would have been their problem, not Respondents'. The fact is that Respondents failed to discharge their obligations by presenting the dispute for resolution in a timely fashion. Nonetheless, the amount involved is modest. Neither party had a clear claim to the funds, nor was either party exceptionally troubled by Respondents' casual handling of the matter. The Delisforts contacted the Florida Real Estate Commission, but did not realize that they were in effect filing a complaint against Respondents, in whom they entrusted the sale of their current home. A final order issued July 18, 1988, involves Respondents' mishandling of a salesperson's commission. The husband of the salesperson owed Respondent Vu some money, and both men agreed that the debtor's wife would work off the debt by selling real estate at Respondent American Homes. However, the debtor's wife was of a different mind. After earning her first commission, she refused to allow Respondents to credit it against her husband's debt. When Respondent Vu ignored her demand for payment, she filed a complaint, which resulted in the final order and Respondents' proper payment of the commission.
Recommendation It is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order finding both Respondents guilty of violating Section 475.25((1)(d)1, reprimanding both Respondents, and requiring Respondent Vu to take a thirty-hour broker management course. ENTERED on February 22, 1995, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on February 22, 1995. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Legal Section--Suite N-308 Hurston Bldg., North Tower 400 West Robinson Street Orlando, FL 32802-1772 Dau Viet Vu 1048 Pine Hills Rd. Orlando, FL 32808
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings. David B.C. Yeomans, Jr., is now and was at all times material hereto a licensed real estate broker having been issued license number 0163386. During times material, Respondent was the qualifying broker for G & A Realty and Investments, Inc., a corporation licensed as a real estate broker in the State of Florida. 1/ From approximately April 1985 to December 1985, Respondent Yeomans was the president and qualifying broker for G & A. Wilfredo Gonzalez, a licensed real estate salesman and Alberto Aranda were each 50 percent shareholders of G & A. Wilfredo Gonzalez, while licensed as a real estate salesman in the employ of G & A, solicited and obtained a client, Alfredo Susi, who made an offer to purchase a commercial property in Dade County, Florida. In connection with the offer, Alfredo Susi entrusted a $10,000 earnest money deposit with Wilfredo Gonzalez to be held in trust in G & A's escrow account. The seller rejected Susi's offer to purchase whereupon Alfredo Susi made demands upon Gonzalez for return of the earnest money deposit. Wilfredo Gonzalez attempted to return the earnest money deposit entrusted by Susi via check dated November 18, 1985 drawn on G & A's escrow account. Upon presentation of the subject check by Susi, it was returned unpaid due to non-sufficient funds. Alfredo Susi has been unable to obtain a refund of the deposit submitted to Gonzalez. Wilfredo Gonzalez used the deposit presented by Susi and did not apprise Respondent Yeomans of what or how he intended to dispose of Susi's deposit. Alfredo Susi had no dealing with Respondent Yeomans and in fact testified and it is found herein, that Susi's dealings in this transaction, were exclusively with Wilfredo Gonzalez. Tony Figueredo, a former salesman with G & A, is familiar with the brokerage acts and services performed by Respondent Yeomans and Wilfredo Gonzalez. During his employment with G & A, Figueredo had no dealing with Respondent Yeonans and in fact gave all escrow monies to Wilfredo Gonzalez. Carolyn Miller, the president and broker for Rite Way, Realtors, an area brokerage entity, is familiar with the customs and practices in the Dade County area brokerage operations. Ms. Miller considered it a broker's responsibility to supervise all salesman and to review escrow deposits and corresponding accounts approximately bimonthly. Theodore J. Pappas, Board Chairman for Keyes Realtors, a major real estate brokerage entity in Dade County, also considered it the broker's responsibility to place escrow accounts into the care and custody of a secretary and not the salesman. Mr. Pappas considered that in order to insure that funds were not misappropriated, checks and balances and intensive training programs would have to be installed to minimize the risk of misappropriation of escrow deposits. Mr. Pappas conceded however that it was difficult to protect against dishonest salesman. Respondent Yeomans has been a salesman for approximately eleven years and during that time, he has been a broker for ten of those eleven years. During approximately mid 1984, Respondent Yeomans entered into a six (6) month agreement with G & A to be the qualifying broker and to attempt to sell a large tract of land listed by Context Realty in Marion County (Ocala). When Respondent agreed to become the qualifying broker for G & A Respondent was a signator to the escrow account for G & A Realty. Sometime subsequent to Respondent qualifying as broker for G & A, Wilfredo Gonzalez changed the escrow account and Respondent Yeomans was unfamiliar with that fact. Respondent Yeomans first became aware of Susi's complaint during late 1985 or early 1986. Respondent Yeomans was not a signator on the escrow account where Wilfredo Gonzalez placed the escrow deposit entrusted by Alfredo Susi. (Petitioner's Exhibit 9) During approximately November, 1986, Respondent Yeomans made it known to the officers at G & A that he was withdrawing his license from G & A and attempted to get G & A's officers to effect the change. When this did not occur by December, 1986, Respondent Yeomans effectuated the change himself and terminated his affiliation with G & A. During the time when Respondent was the qualifying agent for G & A, there were approximately four employees and little activity to review in the way of overseeing real estate salespersons. During this period, Respondent Yeomans reviewed the escrow account for G & A that he was aware of. During the time that Respondent Yeomans was qualifying broker for G & A, he was primarily involved in the undeveloped acreage owned by Context Realty and other REO listed property of G & A. During the period when Respondent Yeomans was qualifying agent for G & A, Wilfredo Gonzalez spent approximately 95 percent of his time managing rental property that he (Gonzalez) owned.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Administrative Complaint filed herein be DISMISSED. RECOMMENDED this 9th day of June, 1987 in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1987.
The Issue Whether respondent committed the acts alleged in the Administrative Complaint, and, if so, whether respondent's license should be revoked, suspended or otherwise disciplined.
Findings Of Fact At all times pertinent to the charges, Reynold Diaz was a licensed real estate broker in the State of Florida, having license number 0379909. The respondent was registered under the trade name of "Progressive Developers" from August 20, 1983 to July 25, 1986. Respondent, in his capacity as a real estate broker, managed four rental units owned by John H. Stephen located at 3405-3407 Nebraska Avenue, Tampa, Florida. Mr. Stephen initially met Mr. Diaz when Mr. Stephen purchased the rental properties from him in 1984, and Mr. Stephen retained respondent to manage the properties at a fee of ten percent of the monies collected. At the end of April, 1985, respondent rented one of the units owned by Mr. Stephen to Ms. Roslyn Thompson. During the course of Ms. Thompson's tenancy, the respondent received from Ms. Thompson a total of $630.00, which represented two months rent and a security deposit of $180.00. None of this money was returned to Ms. Thompson and none of it was delivered to Mr. Stephen by respondent. When Mr. Stephen inquired about the rental money from the unit, in June or July of 1985, Mr. Diaz advised Mr. Stephen that the tenant had not paid her rent for a couple of months. Thereafter, Mr. Stephen went to the rental unit to talk to Ms. Thompson about her payments. Ms. Thompson advised Mr. Stephen that she had paid her rent and produced receipts for the $630.00 which she had paid to respondent. Mr. Stephen terminated respondent's services in June of 1985. In September of 1985 Mr. Stephen met with Mr. Diaz in an attempt to obtain an accounting of the monies received by respondent from Mr. Stephen's tenants. Although respondent had provided monthly statements and payments to Mr. Stephen throughout 1984, respondent stopped providing statements in 1985. Thus, Mr. Stephen had not received a statement in April, May, or June of 1985. When Mr. Stephen met with respondent in September, respondent failed to provide a full accounting of the money he had received from Mr. Stephen's tenants and failed to deliver the money he had received. However, subsequent to the meeting, Mr. Stephen did receive from respondent the amount he was owed on two of the rental units. However, respondent failed to deliver the money he had received from Ms. Thompson. Respondent contends that of the $630.00 he received from Ms. Thompson, he paid Mr. Stephen $225.00 in September and then paid the $405.00 balance in two installments. However, the evidence does not support this contention, and I accept Mr. Stephen's testimony that he never received any rent payments on the Thompson unit. Further, although the evidence does show that respondent paid Mr. Stephen $405.00 in two checks, these payments were for the money owed on the other rental units. Mr. Diaz has failed to account for or deliver to Mr. Stephen the $630.00 received from Ms. Thompson. Respondent, in his capacity as a real estate broker, also managed rental property owned by Sandra K. Nelson located at 1208 East Chelsea Street, Tampa, Florida. Ms. Nelson first met Mr. Diaz when she purchased the rental property, and she retained respondent to manage the property at a fee of ten percent of the monies collected. In August of 1984, the respondent rented the Nelson property to Joseph Ira Pasco. At the time of renting the unit, the respondent received from Mr. Pasco a security deposit of $325.00. However, Mr. Diaz advised Ms. Nelson that Mr. Pasco had not paid his security deposit, and withheld $275.00 from a rental payment to hold as a security deposit. Subsequently, after Ms. Nelson started eviction proceedings, she discovered that Mr. Pasco had a receipt signed by Mr. Diaz for a $325.00 security deposit. However, despite Ms. Nelson's demands, the respondent failed to deliver to Ms. Nelson the $325.00 security deposit or any portion thereof. Further, the security deposit was not returned to Mr. Pasco. However, respondent did ultimately deliver to Ms. Nelson the $275.00 that he had retained from the rental payment. Respondent maintained an escrow account at the Hay Gulf Federal Credit Union from August 8, 1984 until November 26, 1984, when the account was closed. When petitioner's investigator, Leo Huddleston, requested of the respondent all documentation associated with the Stephen and Nelson transactions, respondent produced the carbon copies of three deposit slips and twenty checks drawn on the Bay Gulf account. The documents covered only the months of September and October of 1984, and none of the documents appear to be connected to the Stephen and Nelson transactions. The respondent failed to produce his real estate brokerage escrow account statements, his business records, leases, contracts or other documentation required to be kept by the respondent and produced to the petitioner upon request. At no time did respondent place or maintain the $325.00 security deposit on the Nelson property in an escrow or trust account. Further, since respondent's escrow account was closed at the times respondent collected the rent money and deposit from Ms. Thompson, it is apparent that none of the $630.00 was placed in an escrow or trust account. Respondent admitted that he did not properly handle the funds received from the Nelson and Stephen properties, stating that he managed the properties on the basis of friendship rather than a professional basis. However, he did admit retaining ten percent of all the money collected. From August 20, 1983, until July 25, 1986, the respondent was registered with the Real Estate Commission under the trade name "Progressive Developers." However, at various times during this period, the respondent transacted business both as "Progressive Real Estate Developers" and "Progressive Real Estate Developers, Inc." These names were not registered with the Real Estate Commission.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order suspending respondent's license for a period of two (2) years and imposing an administrative fine of $1,150 to be assessed as follows: Counts I and VI, $200 for each count; Counts II and VII, $200 for each count; Counts III and VIII, $100 for each count; Count IV, $100; and Count V, $50. Respectfully submitted and entered this 9th day of March, 1987, in Tallahassee, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3775 Petitioner's Proposed Findings of Fact: Accepted in paragraph 1. Accepted in paragraph 2. Accepted in paragraph 3. Accepted in paragraphs 5 and 6. Accepted in paragraph 7. 6-7. Accepted in paragraph 8. Accepted generally in paragraphs 6 and 8. Accepted in paragraph 10. Accepted in paragraph 9. Accepted in paragraph 11. Respondent's Proposed Findings of Fact: Accepted that respondent managed Mr. Stephen's property. Second sentence rejected as irrelevant; further, the evidence established that Mr. Stephen first met Mr. Diaz when Mr. Stephen purchased the subject property from Mr. Diaz and retained him to manage it. Third sentence accepted in paragraph 10. Fourth sentence rejected as to the money received from Ms. Thompson, but accepted that money was delivered to Mr. Stephen in paragraph 6. Last sentence rejected as not a finding of fact. Accepted that $275 was paid to Ms. Nelson in paragraph 8; however, reject by contrary finding that the $275 payment was partial payment on the $325 security deposit. Reject, for lack of any evidence that improper name registration was computer error. Remainder rejected as not findings of fact. COPIES FURNISHED: James R. Mitchell, Esquire Harold Huff, Executive DPR - Division of Real Estate Director 400 West Robinson Street DPR - Division of Real Estate Orlando, Florida 32802 400 West Robinson Street Orlando, Florida 32802 Reynold Diaz 7908 N. Florida Avenue Tampa, Florida 33604
