The Issue The issues in this case are as follows: Was Respondent Daniel Oldfather legally responsible for accounting and refund? Were the refund provisions of the receipt form printed in type as required by Rule 21V-10.15, Florida Administrative Code? Was Richard Vanicek due a 75 percent refund? Was Vanicek due a complete refund because of inaccurate information given him? Did Vanicek make written demand for a refund, and was a written demand for the refund necessary?
Findings Of Fact In September of 1979, Sun Rentals and Management, Inc., was a corporate real estate broker holding license number 0208997 and doing business at 2703 East Oakland Park Boulevard in Fort Lauderdale, Florida. At that time, Victor Stevens was a licensed real estate salesperson employed by Sun Rentals. Stevens, as an employee of Sun Rentals, interviewed Richard D. Vanicek concerning Vanicek's rental needs. Vanicek entered into a contract with Sun Rentals (Petitioner's Exhibit number 1) under which he paid Sun Rentals $45 and Sun Rentals was to provide him with rental information on available rentals. Vanicek received a receipt (Petitioner's Exhibit number 3) which provided in pertinent part as follows: ... Notice, pursuant to Florida Law: If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. If you do not obtain a rental you are entitled to receive a return of 75 percent of the fee paid, if you make demand within 30 days of this contract date. ... It was agreed that the receipt was printed totally in ten-point type. Vanicek attempted to visit one of the listings provided to him by Sun Rentals. He encountered difficulty in locating the listing; however, his lack of familiarity with Fort Lauderdale may have contributed to his difficulties. Vanicek found a rental through his own efforts and requested a refund of 75 percent of his $45 fee by telephone. He made his request first to Stevens, who referred him to Daniel Oldfather pursuant to office policy. As a result of this referral Vanicek spoke with a man at Sun Rentals, who may have been Oldfather, and restated his request for a refund. His request was denied. Daniel Oldfather was the licensed broker/salesman for Sun Rentals during September, 1979. He was the office manager of Sun Rentals at that time. Martin Katz was broker for Sun Rentals in September of 1979 (Transcript; Page 261, L 21). Oldfather was the next man in authority at the office under Katz (Transcript; Page 235, L 6). Katz delegated to Oldfather the authority to make refunds. The rental forms, including the rental receipt form (Petitioner's Exhibit number 3), were submitted to the Board of Real Estate.
Recommendation Having found that Daniel Oldfather was not guilty of any of the allegations in the amended Administrative Complaint, it is recommended that Counts I, II and III against him be dismissed. Having found that Sun Rentals and Management, Inc., is not guilty of the allegations contained in Count III of the amended Administrative Complaint, it is recommended that Count III against Sun Rentals be dismissed. Having found that Sun Rentals is guilty of violating Sections 475.25(1)(d) and 475.453(1), Florida Statutes, it is recommended that the license of Sun Rentals be suspended for 60 days, during which time the officers and directors of said corporation may not engage in the practice of real estate sales or brokerage under their names or in any other corporate name. DONE and ORDERED this 4th day of May, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of May, 1982. COPIES FURNISHED: Robert F. Jordan, Esquire Post Office Box 14723 Fort Lauderdale, Florida 33302 James Curran, Esquire 200 SE Sixth Street, Suite 301 Fort Lauderdale, Florida 33301 C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Respondent Don J. Lo Prince was exclusively connected with International Land Brokers, Inc., as a real estate salesperson, from December 29, 1975, to June 29, 1976. Until approximately two months before respondent's employment, Jeffrey Kramer, a real estate broker, was president and active firm member of International Land Brokers, Inc. At that time, one of the corporation's offices consisted of two rooms. The front room contained Mr. Kramer's desk, a secretary's desk, file cabinets, a duplicating machine, and a reception area. The back room was divided into six cubicles, each with a telephone. The office complex had a regular telephone line and a WATS line. Attached to the walls of most of the cubicles most of the time were portions of a packet of papers that was mailed to certain prospects. Pages two through five of composite exhibit No. 1, together with the last page, were at one time posted on the walls of some of the cubicles. On November 3, 1975, Walter J. Pankz, a real estate broker, began work with International Land Brokers, Inc. Between the hours of six and half past ten five nights a week and at various times on weekends, salespersons in the employ of International Land Brokers, Inc., manned the telephones in the cubicles. They called up property owners, introduced themselves as licensed real estate salespersons, and inquired whether the property owner was interested in selling his property. When a property owner indicated an interest in selling, the salesperson made a note of that fact. The following day, clerical employees mailed a packet of papers to the property owners whose interest in selling the salesperson had noted. Petitioner's composite exhibit No. 1 contains the papers mailed to one prospect. The contents of the materials which were mailed out changed three or four times over the year and a half that International Land Brokers, Inc., was in business. As a general rule, a week or so after the initial call to a property owner who proved interested in selling, a salesperson placed a second telephone call to answer any questions about the materials that had been mailed, and to encourage the property owner to list the property for sale with International Land Brokers, Inc. Property owners who listed their property paid International Land Brokers, Inc., a listing fee which was to be subtracted from the broker's commission, in the event of sale. When International Land Brokers, Inc., began operation, the listing fee was $200.00 or $250.00, but the listing fee was eventually raised to about $300.00. In the event the same salesperson both initially contacted the property owner and subsequently secured the listing, the salesperson was paid approximately 30 percent of the listing fee. If one salesperson initially contacted the property owner and another salesperson secured the listing, the one who made the initial telephone call was paid approximately $20.00 and the other salesperson was paid between $75.00 and $90.00 or thereabouts; when more than one salesperson was involved the sum of the amounts paid to the salespersons represented about 35 percent of the listing fee. In telephoning property owners, the salespersons worked from lists which International Land Brokers, Inc., had bought from unspecified individuals, or compiled from county tax records. The last week of May, respondent telephoned Miss Claire K. Bassett of Lowell, Massachusetts, and urged her not to delay in executing a listing agreement with respect to Florida realty she owned. Another salesman, Marcel Cossette, had earlier spoken to Miss Bassett on several occasions and caused the agreement to be mailed to Miss Bassett. Respondent told her to hurry so that her parcels could be assembled into a tract which respondent represented was expected to be sold in September of 1976. Miss Bassett did execute the agreement and pay a listing fee.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the complaint be dismissed. DONE and ENTERED this 29th day of September 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1977. COPIES FURNISHED: Mr. Louis B. Guttmann, III, Esquire Mr. Richard J.R. Parkinson, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Mr. Don J. Lo Prince c/o Morton Wolf 19101 Collins Avenue Miami Beach, Florida 33160
The Issue The issues in this case are whether Respondent, Rosa Fernandez, committed the violations alleged in a six-count Administrative Complaint filed with the Petitioner Department of Business and Professional Regulation on July 17, 2008, and, if so, what disciplinary action should be taken against her Florida real estate broker license.
Findings Of Fact The Parties. Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the “Division”), is an agency of the State of Florida created by Section 20.165, Florida Statutes. The Division is charged with the responsibility for the regulation of the real estate industry in Florida pursuant to Chapters 455 and 475, Florida Statutes. Respondent, Rosa Fernandez, is, and was at the times material to this matter, the holder of a Florida real estate broker license, license number 3000310, issued by the Division. At all times relevant, Ms. Fernandez was the broker for Vizcaya Realty of Miami, Inc., located at 1630 Southwest 17th Terrace, Miami, Florida 33145. Count One. In August 2005, Ms. Fernandez was the listing agent in the Multiple Listing Service (hereinafter referred to as the “MLS”), for property located at 1827 Southwest 18th Avenue, Miami, Florida 33145 (hereinafter referred to as the “Count One Property”). She also represented the buyer in the sale of the Count One Property. The Count One Property, despite the fact that Ms. Fernandez had listed the property in the MLS for $285,000.00, was purchased for $350,000.00, facts which Ms. Fernandez had to be aware of. In response to a complaint concerning Ms. Fernandez’s real estate broker practice, Derrick Ham, an investigator for the Division, met with her. Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count One Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count One Property. While the evidence as to Ms. Fernandez’s precise role in the sale and purchase of the Count One Property was not clear (there was a letter in the file purporting to discharge her services by the seller of the property, but she still continued to be involved with the transaction thereafter), at no time while meeting with Mr. Ham did she indicate that she did not act as broker for the property. Upon review of the records provided to Mr. Ham, it was found that the following information or documents were not maintained in Ms. Fernandez’s records: A broker’s disclosure, an executed sales contract, or a closing statement (HUD1 form); An explanation as to why the sales price ($350,000.00) exceeded the listing price ($285,000.00). Nor was there an authorization from the seller authorizing the change in listing price; and A valid listing agreement between the broker and the seller of the Count One Property. Count Two. In April 2005, Ms. Fernandez represented Carlos Damain in the purchase of property owned by Isaac and Teresa Moncarz, which was located at 447 Aragon Avenue, Coral Gables, Florida 33134 (hereinafter referred to as the “Count Two Property”). The Count Two Property was purchased for $595,000.00, although it was listed for sale at $545,000.00, facts which Ms. Fernandez had to be aware of. Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count Two Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count Two Property. Upon review of the records provided to Mr. Ham, it was found that, while the file contained a sales contract and an HUD1 form for the Count Two Property, the following information or documents were not maintained in Ms. Fernandez’s records: A broker disclosure; An explanation as to why the sales price ($595,000.00) exceeded the listing price ($545,000.00). While a “bidding war” would explain this discrepancy, there was no evidence in the file that such a bidding war had taken place; While the file contained a sales contract, nothing in the sales contract dealt with any repairs to the Count Two Property in connection with the sale. Count Three. In March 2006, Ms. Fernandez represented Ramon Rubiera in the purchase of property located at 1852 Southwest 10th Street, Miami, Florida 33135 (hereinafter referred to as the “Count Three Property”). The Count Three Property, despite the fact that the property was listed for $450,000.00, was purchased for $499,000.00, facts which Ms. Fernandez had to be aware of. Pursuant to an addendum to the contract for the sale to Mr. Rubiera of the Count Three Property, the property was sold to Blanca Dellasera on or about April 12, 2006. The sales price increased to $515,000.00. The increase in price, according to the contract, was for “repairs.” Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count Three Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count Three Property. Upon review of the records provided to Mr. Ham, it was found that the following information or documents were not maintained in Ms. Fernandez’s records: the HUD1 failed to reflect the terms of the contract without explanation. In particular, the HUD1 indicated a seller’s contribution of 3 percent while the contract provided for a 6 percent seller’s contribution. Count Four. On or about April 20, 2005, Ms. Fernandez represented the buyer of property located at 903 Red Road, Miami, Florida (hereinafter referred to as the “Count Four Property”). The Count Four Property was purchased for $549,000.00, although it was listed for sale at $499,000.00, facts which Ms. Fernandez had to be aware of. Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count Four Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count Four Property. Upon review of the records provided to Mr. Ham, it was found that the following information or documents were not maintained in Ms. Fernandez’s records: An indication that the seller made a contribution to cover buyer’s closing costs in the amount of $32,994.00; An indication that the seller made a contribution to cover repairs in the amount of $17,000.00; A broker’s disclosure; and An explanation as to why the sales price ($549,000.00) exceeded the listing price ($499,000.00). While a “bidding war” would explain this discrepancy, there was no evidence in the file that such a bidding war had taken place. Count Five. On or about June 21, 2005, Ms. Fernandez represented the buyer in the purchase of property located at 3707 Le Jeune Road, Coral Cables, Florida (hereinafter referred to as the “Count Five Property”). The Count Five Property sold for $575,000.00 while the asking price was $525,000.00, facts which Ms. Fernandez had to have been aware of. Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count Five Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count Five Property. Upon review of the records provided to Mr. Ham, it was found that the following information or documents were not maintained in Ms. Fernandez’s records: An indication that the seller made a contribution to buyer for repairs in the amount of $15,000.00; A broker’s disclosure; and An explanation as to why the sales price ($549,000.00) exceeded the listing price ($499,000.00). While a “bidding war” would explain this discrepancy, there was no evidence in the file that such a bidding war had taken place. Count Six. On or about March 19, 2006, Ms. Fernandez represented the buyer in the purchase of property located at 1631 Southwest 13th Street, Miami, Florida (hereinafter referred to as the “Count Six Property”). The Count Six Property sold for $500,000.00 while the asking price was $390,000.00, facts which Ms. Fernandez had to have been aware of. Mr. Ham ordered Ms. Fernandez to make available and deliver the real estate broker records for the sale of the Count Six Property. Ms. Fernandez provided Mr. Ham with the records that she had involving the sale of the Count Six Property. Upon review of the records provided to Mr. Ham, it was found that the following information or documents were not maintained in Ms. Fernandez’s records: A copy of an assignment of the sales contract; and A sales and purchase contract signed by Gleen Cabezas; An explanation as to why the sales price ($500,000.00) exceeded the listing price ($390,000.00). Ultimate Facts. Ms. Fernandez failed to maintain complete real estate broker records for the transaction on the Count One through Six Properties. Because of the inadequacies of Ms. Fernandez’s real estate broker records, the Division, through its representative, Derrick Ham, was unable to ascertain, for any of the properties at issue in this case, the specifics of what had transpired. As a consequence of the foregoing, the Division, through Mr. Ham, was unable to determine whether Ms. Fernandez complied with the requirements of Chapter 475, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Commission: Finding that Ms. Fernandez is guilty of the violation alleged in Counts One through Six of the Administrative Complaint as found in this Recommended Order; Placing Ms. Fernandez’s real estate broker license on probation for a period of five years, conditioned on her successful completion of continuing education courses on record- keeping in an amount to be determined by the Commission. Should she fail to complete the continuing education, her license should be suspended until the courses are completed; and Requiring that she pay an administrative fine of $3,000.00. DONE AND ENTERED this 26th of January, 2009, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 26th day of January, 2009. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Douglas D. Stratton, Esquire Stratton & Feinstien, P.A. 407 Lincoln Road, Suite 2A Miami Beach, Florida 33139 Thomas W. O’Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N802 Orlando, Florida 32801 Ned Luczynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondents' Florida real estate licenses should be disciplined based on allegations that they were guilty of fraud, misrepresentation, false promises, false pretenses, dishonest dealings by trick, scheme or device, culpable negligence or breach of trust in a business transaction; failed to account or deliver trust funds; placed, or caused to be placed any contract, assignment, deed, will, mortgage, affidavit or other writing which purports to affect the title of, or encumber, any real property if the same is known to be false or not authorized to be placed of record, maliciously or for the purpose of collecting a commission, or to coerce the payment of money to the broker or salesman or other person or for any unlawful purpose; failed to maintain trust funds in the real estate brokerage account or some other depository until properly disbursed; had funds in an escrow account which were personal funds; failed to preserve and make available to Petitioner, books, records and supporting documents of all trust fund transactions; and used an identification of an organization having to do with real estate when it was not authorized to do so all in violation of Subsections 475.25(1)(a), (b), (d), (e), (k) and 475.42(1)(j), Florida Statutes and rule sections 21V-14.008 and 21V-10.027, Florida Administrative Code.
Findings Of Fact Petitioner, Department of Professional Regulation, Division of Real Estate, is the state licensing and regulatory agency in Florida charged with the responsibility and duty to prosecute administrative complaints in the field of real estate. Respondent, Affirmative Realty, Inc., is now and was at all times material hereto, a corporation registered as a real estate broker in Florida having been issued licensed No. 0267334 and the last license issued was at the address of 4815 East Busch Boulevard, Suite 201F, Tampa, Florida. During times material, Respondent, Sharon Ann Rozelle, was licensed and operating as qualifying broker and officer of Respondent, Affirmative Realty, Inc. having been issued license No. 0541685. On October 26, 1990, Respondents solicited and obtained a property management agreement with Mark Clesi to manage rental units that he owned (a duplex) located at 10118 North 14th Street in Tampa. On June 17, 1991, Respondents solicited and obtained a tenant for Unit A of Clesi's duplex. The lease reflected $300.00 as monthly rent with a $200.00 security deposit to be held in trust by Respondents. On October 12, 1991, Respondents obtained a tenant for Unit B of Clesi's duplex. The lease reflected $280.00 per month as rent with a $200.00 security deposit which was also held in trust by Respondents. The property management agreement in effect between Respondents and Clesi required Respondents to obtain prior approval before making repairs to Clesi's property. The agreement also called for repairs to be made "as needed". Also, Respondent was required to send monthly reports advising Clesi of monies expended toward the apartment for repairs, management fees and rents collected. During June, 1991, Clesi was not receiving reports on a timely basis and therefore requested that Respondent forward such reports in order that he could timely review them. During the period when Respondent served as property manager for Clesi's property, it became necessary for Respondent Rozelle to evict a tenant. The eviction came about as a result of the tenant failing to pay rent. In an effort to force the tenant from the property, Clesi turned off the water service to the property for a period of approximately three months. Clesi did so in an effort to informally evict the tenant. When Clesi's effort proved unsuccessful, Respondent initiated formal eviction proceedings. Throughout the course of the eviction proceedings, Respondent made at least six (6) trips to attend various hearings and motions. For her efforts, Respondent charged Clesi a $300.00 service fee which appears reasonable. After the tenant was evicted, the apartment was extensively damaged and required extensive repairs to make it suitable for human occupancy. Clesi approved the repairs that were necessary to enable the duplex to be rented. Based on the condition of the apartment after the tenant was evicted, it appeared that the evicted tenant had cooked over a charcoal fire for months inside the duplex. Also, there was raw human excrement over the entire bathroom and walls throughout the apartment. The entire apartment had to be sterilized and repainted prior to releasing. The Hillsborough County Health Department issued a notice which banned the duplex from human occupancy until certain specified violations were corrected. Respondent made the necessary repairs and charged Respondent for making them. Although Clesi maintains that he did not authorize all of the repairs that Respondent made, it is more probable than not that he, in fact, authorized the repairs as he was desirous of repairing the property so that he could rent the apartment again. The maintenance company which performed the repairs was "Rozelle's maintenance", a company which was owned by Respondent. There was no effort on Respondent's part to hide the fact that she owned the company as the invoices sent to Clesi clearly reflected the fact that the repair work was done by Rozelle's maintenance. Although it is clear that Respondent and Clesi had disagreements on the extent of repairs needed to make the duplex suitable for human occupancy, Clesi paid for all of the repairs with the exception of a kitchen sink which he contends was replaced simply because it was not shiny. On the other hand, Respondent credibly testified that it was more than the appearance of the sink which needed repairs i.e., the drain was leaking, it was rusty and was causing further damage to the cabinets in the kitchen. Despite the fact that Respondent replaced the sink and Clesi refused to pay, Respondent deducted the amount charged for replacing the sink from Clesi's bill and did not remove it from the unit. Clesi filed a civil claim in Hillsborough County Court seeking $1,411.04 contending that Respondent sent him invoices for unauthorized maintenance charges and fees between June of 1991 and February of 1992. Clesi was unsuccessful in that lawsuit as it was judicially determined that Respondent did not owe Clesi any money based on his claim. On February 7, 1992, Respondent Rozelle filed a claim of lien with the Hillsborough County Circuit Court against Clesi's property for payment of services and Respondent's management of Clesi's duplex. Additionally, Respondent filed five other claims of lien against other owners for property management services. All of these claims of lien have since been released and were done forthwith when Respondent was advised that, despite legal advice to the contrary, it was improper and unlawful for her to do so since the claim of lien included a management fee. On March 14, 1991, Petitioner's investigator, Marjorie G. May, conducted an office inspection and audit of Respondent's escrow accounts based upon records provided (by Respondents). At the time, Respondent's security deposit escrow account maintained at First Union National Bank in Tampa had a trust liability of $350.00 and a bank balance of $270.00 indicating a shortage of approximately $80.00. This shortage came about based on the fact that, unbeknowst to Respondent, her bank debited her account a fee for checks. When these fees came to Respondent's knowledge, she immediately replaced the $79.97 which restored the account to a non-shortage status. The audit also revealed that Respondent's rental distribution escrow account had a zero trust liability but contained $633.00 which appeared to have been Respondent's personal funds. Part of the overage came about based on the fact that Respondent made a required $200.00 initial deposit (her personal money) to keep the account open and maintained at the bank. The remaining balance was part of a shared commission which Respondent was in the process of disbursing to the proper real estate agent. Respondents failed to prepare signed written monthly escrow statement- reconciliations comparing total trust liability with reconciled bank balances of all trust accounts. These reconciliation statements were not filed as charges against Respondents inasmuch as Respondents were new brokers. As such, these matters are not at issue in this proceeding. On April 2, 1992, Petitioner's investigator, J. L. Graham (Scholtz), scheduled an office inspection and audit for Respondent's brokerage activities. This audit was not conducted as Respondent had car trouble on that day and was unable to reschedule it prior to the time that Investigator Graham appeared at Respondent's office. Approximately three weeks later, April 23, 1992, Investigator Graham made on unscheduled visit at Respondent's office. The audit revealed that some of the bank and accounting records which investigator Graham needed were not at the office as Respondent had taken some of the bank and accounting records to her home after the office was burglarized. Another audit inspection was to be conducted two days later but Respondent was unable to keep that appointment because of a scheduling conflict with an appointment with her attorney. On April 21, 1991, Respondent resigned from the Greater Tampa Association of Realtors (the Association). Respondent's name continued to be carried on the Association's roll because her dues were paid through the end of the 1991 calendar year. Respondent utilized the Association's stationery after her resignation during 1991 but whited out the association's letterhead designation on most of the correspondence which left her office. On occasion, a few letters were inadvertently sent out with the Association's letterhead however there was no attempt by Respondent to defraud or otherwise hold herself out as a member of the Association.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Respondent Rozelle be required to pay a fine of $500.00 payable within thirty days of the entry of the Final Order herein. This recommendation is premised on the finding herein that Respondents filed unlawful liens affecting the title to Clesi's property in violation of Section 475.25(1)(a) and 475.42(1)(j), Florida Statutes. DONE AND ENTERED this 2nd day of September, 1993, in Tallahassee, Florida. JAMES E. BRADWELL 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 2nd day of September, 1993. COPIES FURNISHED: Jack McRay, Acting General Counsel Department of Business and 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 Steven W. Johnson, Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Mark A. Neumaier, Esquire Post Office Box 8623 Tampa, Florida 33674-8623
The Issue The issues are whether the Respondent Department of Revenue, properly determined that Petitioner Robert Swiger's candidacy for property appraiser in Lake County, Florida would be a conflict of interest or an activity which would interfere with his state employment as an Appraiser II in the Property Tax Administration Program, and if so, whether he became a candidate in violation of Section 110.233(4)(a), Florida Statutes, when he filed a form appointing a campaign treasurer and designating a depository.
Findings Of Fact Respondent employed Petitioner in the Property Tax Administration Program as an Appraiser II beginning September 1990. Petitioner worked in Respondent’s regional office located in Leesburg, Lake County, Florida. Petitioner wrote a letter dated June 7, 1995 to John Everton, Petitioner’s Division Director (now Program Director of Respondent’s Property Tax Administration Program). In the letter, Petitioner requested permission to seek the elective office of Lake County property appraiser while continuing his state employment. By letter dated June 22, 1995, Mr. Everton advised Petitioner that he could not seek the office of property appraiser while employed as an Appraiser II in the Property Tax Administration Program. The letter directed Petitioner to offer his resignation before he pre-filed with the supervisor of election if he decided to pursue his candidacy. On July 12, 1995 Petitioner wrote to L. H. Fuchs, Respondent’s Executive Director, requesting permission to seek the Lake County property appraiser's office. Petitioner wanted to continue working for Respondent until July of 1996 when he would either take a leave of absence or resign when he “qualified” to be on the ballot. Mr. Fuchs received the Petitioner's request on July 19, 1995. In a letter dated July 27, 1995 Mr. Fuchs responded to Petitioner's request by stating: It is the Department's position that your campaign for property appraiser would negatively effect: your ability to perform your job responsibilities which include conducting independent evaluation [sic] of local tax roles; and the agency's efforts to maintain its independence from the local administration of ad valorem taxes. The Executive Director's response went on to state: In your letter to me, you request authorization to continue working for the Department until July 1996, and then, either to take leave of absence without pay or to resign when you qualify to be on the ballot. However, it is the Department's position that your campaign activities commence at the time you pre-file your intent to run for office as required by local rules, because it is at that time that your personal interest in pursuing the office of the property appraiser conflicts with the Department's interest in maintaining complete independence from the local administration of ad valorem taxes. Therefore, your request for approval to run for public office while continuing your employment with the Department is again hereby denied. As instructed by your Division Director, you must resign from the Department prior to commencing your campaign by performing the pre-filing requirement. Failure to do so shall result in disciplinary action to dismiss you from your position in accordance with the Department’s disciplinary standards and procedures, and rule chapter 60K-9, F.A.C., on the grounds that you are in violation of the Department’s Code of Conduct, section 110.223, Florida Statutes, and rule 60K-13.002(3), F.A.C. Mr. Fuchs concluded that his decision was final agency action which Petitioner could appeal pursuant to Section 120.57, Florida Statutes. By letter dated August 16, 1995, Petitioner’s counsel requested clarification of Respondent’s position as set forth in the Executive Director's letter of July 27, 1995. On August 18, 1995, Petitioner filed his request for formal hearing with Respondent. Respondent forwarded this request to the Division of Administrative Hearings on September 1, 1995. On September 8, 1995, Respondent's Deputy General Counsel responded to the request of Petitioner’s counsel for clarification of Respondent’s July 27, 1995 denial letter. This letter sets forth the factual and legal basis for Respondent’s conclusions that: (1) Petitioner’s candidacy would involve an interest which conflicts or activity which interferes with his state employment; and (2) Petitioner would have to resign his state employment before filing his “Appointment of Campaign Treasurer and Designation of Campaign Depository, Form DS-DE 9” (Form DS-DE 9). On September 11, 1995, Petitioner filed his Form DS-DE 9 as required by Section 106.021(1), Florida Statutes, with the Supervisor of Elections for Lake County, Florida. Respondent received proof of such appointment and designation on September 13, 1995. On September 13, 1995, Respondent notified Petitioner that he was dismissed under the extraordinary circumstances provisions of Rule 60K-9.0046, Florida Administrative Code. Respondent dismissed Petitioner because he violated Respondent’s Disciplinary Standard Number 14, Insubordination, and Disciplinary Standard Number 29, Violation of the provisions of law or Department of Revenue rules or policies. Respondent took the position that: (1) Petitioner was insubordinate when he disregarded Respondent’s denial letters and proceeded to file his Form DS-DE 9 without first resigning his state employment; and Petitioner became a candidate in violation of Section 110.233(4), Florida Statutes, and Rule 60K-13, Florida Administrative Code, when he filed his Form DS-DE 9. Petitioner requested a predetermination conference pursuant to Rule 60K-9.0046, Florida Administrative Code. Respondent conducted the conference on September 14, 1995 so that Petitioner’s counsel would have an opportunity to participate. After the conference, Respondent provided Petitioner with a Final Disciplinary Action letter dated September 14, 1995. This letter gave Petitioner the right to appeal the dismissal action to the Public Employees Relations Commission. Respondent is the agency charged with enforcing and implementing the state’s taxing authority. Its regulatory authority includes regulatory oversight and the certification process of county ad valorem tax rolls and related tax administration. County property appraisers determine the just value on each parcel of real estate and the assessment on homestead property pursuant to Sections 193.011 and 193.155, Florida Statutes. Respondent has the duty to insure that each county property appraiser assesses all properties at just value, with equity and uniformity. The working relationship between Respondent’s staff and the county property appraiser and his or her staff is naturally tense. To overcome this tension, Respondent strives to achieve statutory compliance through cooperation with the local property appraiser and his or her staff. The primary focus of Respondent’s Property Tax Administration Program is to determine the relevant level of property assessment in each county and to quantify that assessment level as it relates to a statewide average assessment level. In order for Respondent to accomplish its mission, Respondent has to approve the tax roll and certify the assessment level in each county annually. The Department of Education equalizes school funding and disperses general revenue funds to the county school districts based on their relative assessment level. Each county’s relative ranking dictates the amount that it must levy in county school district taxes. Accordingly, Respondent acting through its appraisers must remain impartial in evaluating the tax rolls in all counties. The position of Appraiser II entails the following duties and responsibilities: Assists county property appraiser and employees in the county appraiser's office in property appraisal techniques to arrive at estimated value conclusions of complex commercial, residential properties, and personal property. Administers policies and procedures pertaining to appraisal of real and personal properties set forth in the Florida Statutes, guidelines and other departmental rules and regulations. Consults with all levels of governmental officials, property owners and private appraisers on problems relative to the appraisal of real and personal property in compliance with existing Florida Statutes and guidelines. Investigates and reports on conduct and performance of all county officials involved in ad valorem tax activities. Investigates taxpayers complaints. Applies the appraisal process as defined by the American Institute of Real Estate Appraisers to arrive at an estimate of value for all types of property. This includes using existing Department of Revenue Cost Manual and other cost manuals as required to arrive at an estimate of value by the cost approach in compliance with existing Florida Statutes and guideline. Performs related duties as required. As an Appraiser II, Petitioner did not routinely perform all of the duties described in his job description. He spent the majority of his time performing appraisal studies, sales ratio studies, and final reviews in the counties surrounding Lake County. Petitioner's job duties and responsibilities entailed safeguarding certain confidential tax information pursuant to: Department Directive 0101.10; (b) Sections 6103 and 7213, Internal Revenue Code (IRC); and (c) various internal security procedures and policies for safeguarding confidential information and information sources. Confidential appraisal information generated by county property appraisers is available to Respondent’s appraisers within a particular region. Likewise, confidential appraisal information generated by Respondent’s appraisers for a particular county in that region is available to all of Respondent’s appraisers within that region. Appraisal studies generated by Respondent’s appraisers together with all supporting documents remain confidential and unavailable to the county property appraisers until the year-end review. During the final review, Respondent’s appraisers and the county property appraisers discuss any discrepancies between their work. The findings of the studies do not become public until the final review process is complete. Petitioner claims that he did not have a computer terminal or the necessary computer skills to personally access confidential information which was stored electronically. However, he could request computer printouts from Respondent’s offices in Tallahassee as well as Respondent’s Leesburg office. Printouts for every piece of property which was a sample in the 1995 Lake County in-depth study was stored in the Leesburg office. That study was complete in June of 1995 before Petitioner requested permission from Respondent to run for office. Respondent began gathering confidential information for the 1997 Lake County in-depth study in October of 1996 before the November general election. Respondent’s appraisers often discuss problems in their work and share information informally. Periodically they engage in a “peer review” of each other’s appraisal work. Nothing prohibited Petitioner from gaining access to confidential information contained within a Lake County in-depth study even though he may not have done the appraisal work in that county. Petitioner had access to that information before it was available to the Lake County property appraiser. The incumbent county property appraiser knew that Petitioner had access to confidential information while he was employed by the state. During the campaign, the incumbent believed that Petitioner continued to receive inside information from Respondent’s staff. The local property appraiser’s perception was unfounded but it caused him to believe that Petitioner had an unfair political advantage. The erroneous perception caused conflict between the incumbent and Respondent. This conflict would have been much worse if Petitioner had run for county property appraiser while continuing his state employment. Even if Petitioner did not seek out confidential information or use it in his political campaign, the perception that it might be available to him jeopardized Respondent’s relationship of cooperation and trust with the incumbent Lake County property appraiser. Respondent does not have a set policy as to whether its appraisers can perform appraisal studies or in-depth studies in the county of their residence. Petitioner did not want to perform appraisals in Lake County because he knew from the beginning that he wanted to run for the office of county property appraiser. He thought he could avoid the appearance of impropriety as long as he did not perform appraisals in Lake County. Respondent never required Petitioner to perform an appraisal study in Lake County. However, Respondent assigned Petitioner on occasion to assist Respondent in completing sales ratio studies by verifying randomly selected sales of real property in Lake County. In verifying the sale of a piece of real property, Petitioner was responsible for determining if the sale was made at arm’s length. This involved making a field inspection to compare the property appraiser’s records to the actual property. If Petitioner could not confirm the sale price with the property owner by mail, he would have to contact the owner or seller by phone or in person. When Petitioner verified sales of real property in Lake County, he presented himself to the public as Respondent’s representative. If Petitioner determined that the county property appraiser’s records did not accurately reflect the sale price, his work could result in a change to the county property appraiser’s numbers to reflect the correct sales price. If Petitioner determined that a sale was not conducted at arm’s length, Petitioner could exclude it from Respondent’s sales ratio study. Thus, Petitioner’s work had a direct impact on Respondent’s decisions relative to the Lake County tax roll. Petitioner performed minimal work in and for Lake County. However, at any time, Respondent could have made a legitimate business decision, including budgetary considerations, which would have required Petitioner to perform job assignments in any county in the Leesburg region, including Lake County. For example, Petitioner provided aid and assistance in Respondent’s Lake City regional office during his employment in the Leesburg regional office. If Petitioner had continued to work in surrounding counties while running for office against the Lake County property appraiser, the public would have had difficulty distinguishing between campaign statements that represented the candidate’s personal opinions and statements that appeared to represent Respondent’s official position. This was true in the campaign even though Petitioner ran as former state employee. Such conflicts severely compromise the public’s perception of Respondent’s independence in local tax administration matters in all the counties under its jurisdiction. Petitioner’s continued state employment during the campaign would have placed Respondent in the middle of a political contest over which it had no control and in which it had a duty to remain neutral. It was difficult enough for Respondent to remain neutral with a former employee seeking elective office. Appraisal studies for one county can affect the appraisal assessments in another county. For instance, the appraisal methodology used by Respondent in Dixie County has been introduced into litigation presently occurring in Levy County. In that case, the neighboring county’s methodology for applying and calculating the “base rate” (a unit of measurement per square foot for dollar valuation of structures) has become an issue. Respondent develops a "systematic base rate" for use in the appraisal system from data gathered from a particular region. Data gathered for the Leesburg regional office included data from Lake, Brevard, Indian River, Flagler, Polk, Sumter, Orange, Marion, Manatee, Volusia, Seminole, Citrus, Hillsborough, Hernando, and Pasco Counties. Respondent uses this data to determine what the appropriate base rate would be for any one of those counties. Thus, Petitioner’s appraisal work affected the appraisal assessments in Lake County even though Respondent did not assign him to do appraisal work that county. When a county’s tax role cannot be reconciled within 90 percent of Respondent’s assessment values, Respondent issues review notices or administrative orders directing compliance. Such disputes can eventually result in litigation with Respondent and the local property appraiser as adverse parties. In that circumstance Respondent’s appraiser must defend his work product in court. Respondent is a party defendant to all lawsuits in which a taxpayer challenges a county property appraiser’s assessment. In these lawsuits Respondent must assist the county property appraiser and defend valuation methodologies which the county property appraiser uses as directed by Respondent. When Respondent becomes involved in litigation, Respondent’s property appraisers are required to testify regarding their work as it relates to the subject property. The appraisers also might be required to defend their work product as analogous appraisal methodologies and practices, even though their work was done in and for different counties from the litigating county. Such testimony would be subject to impeachment if Respondent’s appraisers make campaign statements while running for the office of county property appraiser that are contrary to Respondent’s legal position. The resulting conflicts may not become apparent until a case goes to trial years after Respondent’s appraiser participates in a political campaign. Petitioner planned to seek the office of Lake County property appraiser for several years before he actually sought permission from his state employer. He never obtained Respondent’s permission to seek political office. He began his campaign without authorization from the Department of Management Services. Petitioner officially began his campaign for Lake County property appraiser when he filed Form DS-DE 9 with the Lake County supervisor of elections on September 11, 1995. At that time he made his intentions clear to the public. Petitioner could not complete the process of qualifying for office and take the candidate’s loyalty oath until sometime between February and July 17, 1996. He did not want to wait that long to begin his campaign activities which included soliciting campaign funds. Petitioner felt he would be at a disadvantage in the campaign if he did not immediately begin to raise money to fund his campaign. In the political campaign, Petitioner made statements concerning the income approach to valuing property. He characterized the use of income capitalization as valuing household or business income and not property. He also characterized the income approach to appraisal as an income tax. These characterizations were in direct conflict with Respondent’s position in a law suit filed by a cable television company against the incumbent Lake County property appraiser and Respondent over tangible personal property taxes. Petitioner’s characterizations about the income approach methodology called into question any appraisals that he conducted in any county using that methodology. During the political campaign Petitioner also made statements concerning impact fees claiming that they have no affect on the value of real property. Petitioner’s statements on impact fees conflict with Respondent’s position on impact fees. It is foreseeable that, as a result of Petitioner’s comments, a taxpayer will litigate the issue of whether impact fees affect property value. Petitioner’s position on impact fees may adversely affect Respondent’s ability to support its position in court. Petitioner made incorrect statements during the campaign regarding the county property appraiser’s assessed value of Lake County property. For example, he claimed that the county property appraiser had assessed the county’s property at 122 percent of its just value in 1994. This statement conflicted with Respondent’s determination that Lake County’s 1994 level of assessment was 93.4 percent. When Petitioner worked for Respondent, he was a Certified Florida Evaluator (CFE). After the termination of his employment, Petitioner was no longer entitled to claim that designation. Nevertheless, Petitioner continued to identify himself as a CFE during the campaign. This campaign tactic contributed to the perception of the county property appraiser that Respondent was acting with Respondent’s sanction. County property appraisers know how Respondent’s appraisers in other counties apply Respondent’s policy. Likewise, Respondent’s appraisers know how their counterparts assigned to neighboring counties apply appraisal principles in Respondent’s appraisal studies. The county property appraisers would become immediately distrustful and suspicious of Respondent’s motives if one of Respondent’s appraisers were to seek the office of county property appraiser. They would assume that Respondent was attempting to call their appraisal methodologies into question. Such a campaign would be disruptive to the tax administration process. It would destroy the atmosphere of trust and confidence that must exist between Respondent and the county property appraisers. Even though Petitioner was a former employee during the campaign at issue here, Petitioner’s candidacy aroused suspicion and distrust on the part of the county property appraiser towards Respondent's tax administration staff and its appraisers. The incumbent and his staff were suspicious that Respondent was promoting Petitioner’s campaign in order to foster its own ideas and judgments concerning appraisal processes and techniques. They were concerned that Respondent would take punitive measures against them during the next audit. Respondent must maintain a neutral position in any political campaign. Respondent certainly cannot be expected to grant its appraiser permission to seek an office but retain the right to oversee the appraiser’s activities and to censure his or her comments. Thus, Respondent properly follows a policy of not approving its property appraisers' candidacies for the office of county property appraiser. The candidacy for the office of county property appraiser by a still-employed agency appraiser presents a real conflict of interest between Petitioner's state employment and Respondent's statutory mission. The campaign at issue here is the perfect example of how the platform or public statements of a candidate can conflict with Respondent's administration and interpretation of the tax laws under Chapters 192-197, Florida Statutes. If Petitioner had continued his state employment, his campaign would have impaired Respondent’s reputation for impartiality and independent judgment in appraisal work and administration of the tax laws among all of the counties under its jurisdiction. On September 3, 1996, Petitioner was defeated in the Republican Primary for the office of Lake County Property Appraiser.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that Respondent enter a Final Order affirming its decision to terminate Petitioner’s state employment based on findings that his candidacy involved a conflict of interest with his continued state employment and that he became a candidate for the office of Lake County Property Appraiser without proper authorization.DONE AND ENTERED this 7th day of March, 1997, in Tallahassee, Florida.SUZANNE F. HOOD Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of March, 1997. COPIES FURNISHED: Patrick A. Loebig, Esquire Brian F. McGrail, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Marie A. Mattox, Esquire 822 North Monroe Street Tallahassee, Florida 32303 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
