Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the law of the State of Florida, in particular, Section 20.30, Florida Statutes, and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. The Respondent Gustavo Mejido is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0059653 in accordance with Chapter 475, Florida Statutes. The last license issued said Respondent as a broker was for the address of the offices of G.M. Realty, Inc. Respondent, G.M. Realty, Inc., is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0208962 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 715 S.W. 73rd Avenue, Miami, Florida. Respondent Gustavo Mejido was at all times pertinent hereto the qualifying broker for Respondent G.M. Realty, Inc. On August 30, 1990, Hector Sehwerert, an investigator employed by Petitioner, conducted an office inspection and audit of the office account and of the escrow/trust account maintained by Respondents. The audit reflected that there was a shortage in the escrow/trust account in the amount of $1,006.68. Respondents' sales escrow/trust liability was $88,220.00 while the balance of the escrow/trust account was $87,213.32. Respondents were unable to immediately explain the cause of the shortage, but on the same day the shortage was detected, Respondent Mejido caused the shortage in the escrow/trust account to be corrected. He caused the sum of $1,006.68 to be transferred from Respondent G.M. Realty's operating account to its escrow/trust account. The undisputed testimony at the formal hearing was that the discrepancy was caused by a clerical mistake. Respondents failed to reconcile its escrow/trust account for the month of July 1990, and for subsequent months as required by the rules of the Florida Real Estate Commission. While Respondents had utilized its own system of reconciling its books for 14 years without having any other difficulty, this system was defective because the reconciliation did not include a determination of the total amount of escrow liability. Respondents have agreed to use the reconciliation method recommended by the Petitioner in the future. The licenses of Respondents have not been previously disciplined.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which finds that Respondents have violated the provisions of Section 475.25(1)(e) and (k), Florida Statutes, and which issues a letter of reprimand to said Respondents for such violations. RECOMMENDED in Tallahassee, Leon County, Florida, this 16th day of May, 1991. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of May, 1991. COPIES FURNISHED: Steven W. Johnson, Esquire Florida Department of Professional Regulation Real Estate - Legal Section Hurston Building - North Tower Suite N-308 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Armando E. Lacasa, Esquire 3191 Coral Way Third Floor Miami, Florida 33145 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 APPENDIX TO THE RECOMMENDED ORDER, CASE NO. 91-0376 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1-6a. are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 6b. are rejected as being unnecessary to the conclusions reached or as being subordinate to the findings made. The proposed findings of fact in the first sentence of paragraph 7 are rejected as being contrary to the finding that the month audited was July 1990, not August 1990. The remaining proposed findings are rejected as being the recitation of testimony or as being subordinate to the findings made. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. 1. The proposed findings of fact submitted by Respondents are adopted in material part by the Recommended Order.
Findings Of Fact At all times relevant hereto, respondent, Annette J. Ruffin, held real estate broker license number 0076385 issued by petitioner, Department of Professional Regulation, Division of Real Estate. When the events herein occurred, respondent was owner and broker for Century 21 A Little Bit Country at 915 Lithia Pinecrest Road, Brandon, Florida. She is presently employed by U. S. Homes Corporation in Tampa, Florida. James and Shirley Yaksic wished to sell their residence at 3512 Plainview Drive in Brandon, Florida. They listed their property with Century 21 Solid Gold Properties II, Inc. in Brandon in December, 1983. Deborah Cassidy was a salesman at respondent's office, and knew her parents, J. R. and Helen Anderson, were in the market for a new home. With Cassidy's assistance, the Andersons executed a contract on February 16, 1984, to purchase the Yaksics' residence. The contract called for a purchase price of $65,000 with a down payment of $10,000, including a $500.00 cash deposit which was given to respondent's firm several days after the contract was executed. The deposit was placed in Ruffin's escrow account on February 28, 1984. The Andersons were also required to seek VA financing on the balance owed. After the contract was accepted by the Yaksics on February 17, Helen Anderson made application on February 23 for a $55,000 VA loan with Norwest Mortgage, Inc., a lending institution in Tampa. Florida. Since her husband was in New York State, only Helen signed the loan application agreeing to allow verification of all representations made in the application. While filling out the loan application at Norwest, Helen Anderson learned that the Veterans Administration allowed applicants to apply for loans equal to 100% of the value of the property. Since the Andersons preferred to make no down payment, Helen Anderson wrote Norwest in early March requesting that their loan application be increased from $55,000 to $65,000. She also noted that she did not sign the "disclosure statement" on behalf of her husband since "it would be incorrect." In response to this Letter, Norwest wrote the Andersons in early April requesting a number of items needed to process the application as well as an amendment to the contract reflecting that the sellers agreed to 100% financing by the buyers. The Andersons did not respond to this inquiry. In addition, they never, advised the sellers that they had changed their loan application to 100% financing, and that the sellers would be required to pay more discount points at closing. Because no amendment to the contract was ever filed, Norwest processed the application for a $55,000 loan. Due to insufficient income and excessive obligations, the application was denied. The Andersons were so notified by letter dated May 3, 1984. After Helen Anderson received the denial letter she telephoned respondent's office manager on several occasions to seek a refund of her deposit. This information was apparently conveyed to Ruffin by the office manager. About the same time the sellers were advised by the listing salesman that the Andersons did not intend to close. On May 5, the sellers wrote a letter to Solid Gold requesting that it notify the selling broker to not "release the binder to the buyers as we are entitled to this money." For some reason, a copy of this letter was not mailed to respondent until May 31, and she received it in early June. Even though Ruffin may have been orally advised in early May of the Yaksics' intended claim by the listing office, she had no concrete evidence of this intention until she received their letter in early June. On June 29, 1984, Helen Anderson wrote respondent's office manager a letter requesting a return of her deposit no later than July 9. She also indicated the letter was being sent pursuant to instructions received from petitioner. On July 2, Ruffin replied by letter stating that "we cannot release your deposit as the house was off the market for such a long time," and that Norwest had advised her that the Andersons "did not bring in a lot of the information until it was too late." After Helen Anderson filed a complaint with the Department of Professional Regulation (DPR), DPR wrote respondent a letter dated July 19, 1984, stating in part that Anderson had been refused her deposit and that its records did not show that respondent had notified DPR of conflicting demands for that money. On July 30, 1984, respondent replied to DPR's inquiry and gave her version of the circumstances surrounding the transaction. After receiving no reply to this letter, she wrote a second letter in late December, 1984 to the Division of Real Estate (Division) requesting advice on the deposit matter. The Division sent a her form for requesting an escrow disbursement order on January 4, 1985 which was returned by respondent within a few weeks. An escrow disbursement order was eventually issued by the Division on April 19, 1985 directing her to refund the deposit to the Andersons. She did so on May 5, 1985. In conjunction with its investigation, DPR obtained copies of respondent's escrow account bank statements during the period when the Andersons' deposit was retained by Ruffin. Although the $500.00 deposit should have been maintained in that account from February, 1984 until disbursement in May, 1985, her account dropped below $500.00 on sixteen separate days during this period of time, and continuously from February 28 through April 30, 1985. Respondent, who has been a broker since 1977, maintained a record of all escrow deposits and expenditures in a ledger book which reflected when the Anderson money was deposited and when it was paid out. Although she inferred the problem may have been attributable to her bookkeeper, no adequate explanation was given as to why her bank balances dropped below $500.00 on a number of occasions. She acknowledged that she learned of the conflicting demands in May, 1984, but felt that she could still "solve" the credit problem of the Andersons. She stated that she intended to give notice to the Division of the conflicting claims on the deposit and needed no encouragement from the Division to do so. There is no evidence that respondent has ever been disciplined on any other occasion since first receiving her salesman license around twelve years ago.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty as set forth in the Conclusions of Law portion of this order. All other charges should be DISMISSED. It is recommended that respondent's broker license be suspended for ninety days and that she be fined $500.00. DONE and ORDERED this 5th day of September, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Bearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1985.
The Issue Whether Respondent Hood placed an instrument on record in violation of Section 475.42(1)(j), Florida Statutes, and should have his license suspended, or whether Respondent should be otherwise disciplined.
Findings Of Fact Respondent Robert R. Hood holds real estate broker's license Number 0041003 and is a non-active real estate broker residing in Tampa, Florida. He transferred his license to non-active broker status on March 28, 1977. An administrative complaint was filed against the Respondent alleging that he filed a false and ineffective affidavit attached to a settlement agreement and stipulation on February 24, 1977, which clouded the title to certain property, and which was filed for the purpose of coercing the payment of money to Respondent. Respondent requested an administrative hearing. William C. Mayo was the trustee, one of the beneficiaries, and part- owner of real property in Santa Rosa County, Florida, by virtue of a trust agreement executed between Mayo, Respondent Hood, and others on October 31, 1973. Part of the agreement was that the agreement would not be recorded. Disputes arose between the parties. On December 31, 1975, a settlement agreement and stipulation was entered into and the property was to have been sold. The property was not sold, and the parties continued to disagree. Thereafter, on November 2, 1976, a second settlement agreement and stipulation was entered into which was to have superseded the agreement of December 31, 1975. This second stipulation and agreement was executory and contingent, however, upon a release of Respondent Hood from a certain promissory note, and upon the payment of $5,000.00 after six (6) months or the sale of the subject property. The agreement also contained a statement that "Mayo shall transfer subject property to Jeffrey Warren, as trustee" after February 27, 1976. Respondent Hood was to have paid for the preparation of the documents and recordation, which he did not do or offer to do, and the transfer was not made. The agreement and stipulation of November 2, 1976, was intended to act as a general release by the Respondent of the subject property and a settlement of the complicated disputes between Respondent Hood and Mr. Mayo. Part of the November 2nd agreement and stipulation was completed with Respondent Hood being released from the promissory note, but the $5,000.00 had not been paid as of the date that Respondent Hood recorded the affidavit and agreement and stipulation of December 31, 1975, and the property had not been sold. A suit was filed (Case No. 77-2254) by William Charles Mayo against Respondent Hood, and a temporary injunction dated March 7, 1977, was entered. among other things, the court found that the recording by the Respondent of the affidavit and stipulation of December 31, 1975, in the county where the real property was located affected the title to the property, and that the recording was in violation of Florida Statute 475.42(1)(j). Thereafter, the temporary injunction was modified, and an order transferring the case to another division was entered. The temporary injunction granted on March 7, 1977, was superseded by the order, which did not refer to the recordation by Respondent Hood of the affidavit therein held to be in violation of Section 475.42(1)(j), Florida Statutes. On April 7, 1977, Respondent Hood was paid $5,000.00 by cashier's check pursuant to the agreement and stipulation of November 2, 1976. Based on the testimony adduced at the trial and a review of the evidence submitted, it is obvious that the business arrangements between Respondent Hood and Mr. Mayo were beset by distrust, which led to bitter disagreement and three law suits. Neither party performed all their agreements, and neither party kept the other informed as to transactions involving the original trust agreement. Money was owed by Mr. Mayo to Respondent Hood at the time Respondent Hood filed the questioned affidavit together with the agreement of December 31, 1975, in the public records of Santa Rose County, Florida. This instrument added to the clouding of the title of the real estate involved, and the recordation was contrary to the agreement contained in the original trust agreement of 1973. However, notice was already on record of the trust agreement by virtue of a memorandum of assignment of beneficial interest trust agreement filed by William Charles Mayo on July 3, 1975, in Santa Rosa County, Florida, contrary to the agreement executed between the parties on October 31, 1973. Respondent Hood was not acting as a real estate broker or salesman, although he was a licensed broker, when he recorded the affidavit and agreement and stipulation on the public records of Santa Rosa County, Florida. The Instruments did cloud the title to real property, but they were filed for the purpose of collecting money owed to him personally. Final arguments and memoranda of law were filed by both parties, and said instruments were considered in the preparation of this Order.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Respondent, Robert R. Hood, be reprimanded. DONE and ORDERED this 6th day of June, 1979, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Kenneth M. Meer, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Roger E. Whigham, Esquire 2402 West Cleveland Post Office Box 438B Tampa, Florida 33677
Findings Of Fact The following are the facts which the parties agree should be considered in resolving the legal issues raised in the instant case: The Department is a state government licensing and regulatory agency. Respondent Marsh A. Ferreira is now, and has been since 1990, a licensed real estate broker in the State of Florida. He holds license number 0523079. Since becoming a licensed broker, the only complaint that has been made against him in connection with the practice of his profession is the complaint that is the subject of the instant case. At all times material to the instant case, Respondent Ferreira was licensed and operating as a qualifying broker and officer of Respondent M A F Realty, Inc. (Realty). Realty is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida under license number 0263255. The license reflects that Realty's address is 4143A S.W. 74th Court, Miami, Florida 33155. Like Respondent Ferreira, Realty has an unblemished disciplinary record to date. On or about July 31, 1991, Hector Schwerert, an investigator with the Department, conducted an office inspection/audit of Realty during business hours. The inspection/audit was routine. It was not prompted by any complaint against Respondents. Schwerert gave no advance warning of his visit. Nonetheless, Respondents gave him their full cooperation and did not seek to postpone or delay the inspection/audit. Schwerert's inspection/audit revealed the following: Realty's sales escrow account #20207038305 had an approximate shortage of $8,359.31. Its total trust liability was $8,500.00, but there was only $140.69 in the account. Respondent Ferreira was the sole employee of Respondent. He, and he alone, had access to the escrow account, as well as Realty's operating account. On occasion, he would "unintentionally confuse the checkbooks" of the two accounts and inadvertently use monies in the escrow account for operational purposes and monies in the operating account for escrow purposes. It was this "unintentional confusion" that caused the shortage in the escrow account. During the period from January, 1990, when Realty was incorporated, to the date of the inspection/audit, Respondent Ferreira, on behalf of Realty, prepared and signed written escrow account statements/reconciliations on a monthly basis. On two, and only two, of these statements/reconciliations, the escrow account balance did not equal the amount of Realty's trust liability and there was no explanation given for the discrepancy, nor any indication that corrective action would be taken. On August 1, 1991, immediately upon realizing that he had inadvertently deposited trust funds in Realty's operating account instead of its escrow account, Respondent Ferreira withdrew $10,000.00 from the operating account and deposited it into the escrow account to eliminate the shortage in the escrow account. Since the July 31, 1991, inspection/audit Respondent Ferreira has taken a 30-hour broker's course in which he received an above average score and has met his continuing education requirements. 1/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Respondents guilty of the violations alleged in the Administrative Complaint and imposing upon them, for having committed these violations, the penalties proposed by the Department in its proposed recommended order, which are recited above. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of April, 1993. STUART M. LERNER 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 16th day of April, 1993.
The Issue The issue in this case is whether the Respondents' real estate licenses should be disciplined based upon charges set forth in the Administrative Complaint which allege violations of Sections 475.25(1)(b),(e), and (k), Florida Statutes.
Findings Of Fact The Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints which allege, in particular, violations of Chapters 455 and 475, Florida Statutes, and rules promulgated thereunder. Respondent David Shihada is now and, at all times material hereto, has been licensed as a real estate broker in the State of Florida, having been issued license number 0239798. His most recent broker's license was issued to him at Shihada Real Estate, Inc., 959 S.W. 87th Avenue, Miami, Florida 33174. Respondent Shihada Real Estate, Inc., is now and, at all times material hereto, has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0239797. The last license issued was at the address of 959 S.W. 87th Avenue, Miami, Florida 33174. At all times material hereto, Respondent David Shihada was licensed and operating as the qualifying broker for Respondent Shihada Real Estate, Inc. From May 3, 1990 to May 10, 1990, Petitioner's investigator, Hector F. Sehwerert, conducted an audit of Respondents' escrow accounts. This audit revealed that Respondents' pending sales escrow account #0103005236-06 had a total current liability of $22,050, with a current bank balance of $20,596.56, thereby reflecting a shortage of $1,453.44. In a sworn affidavit dated May 10, 1990, Respondent David Shihada stated that the shortage was a bank "mistake". On or about May 10, 1990, the Respondents deposited sufficient funds, by check numbered 1931, to cover the $1,453.44 shortage in their escrow account. On or about May 8, 1990, Gabriel Sanchez, Respondents' salesman who is also an officer at Westchester Bank where Respondents maintain their escrow account, signed a sworn affidavit stating that he had just completed an attempted reconciliation of the aforementioned escrow account from May 1989 to May 2, 1990. Sanchez was unable to find any shortage in Respondents' escrow account. He will be doing monthly reconciliations for the Respondents from May 1990 forward. From May 31, 1989 to May 2, 1990, the Respondents failed to complete and sign written monthly reconciliation statements comparing their total trust liability with the reconciled bank balance of all trust accounts as required by the rules of the Florida Real Estate Commission.
Recommendation Based upon the foregoing, it is recommended that a Final Order be issued concluding that Respondents' actions as found above constitute a violation of Section 475.25(1)(b), Florida Statutes, and further: Imposing an administrative fine in the total amount of $500; Placing the Respondents' real estate licenses on probation for a period of one year, provided that the Respondents shall not be required to retake any state licensure examination as a result of this proceeding, and provided further that Respondent David Shihada shall provide quarterly escrow account activity reports, including evidence of compliance with Rule 21V-14.012, Florida Administrative Code, as well as evidence of successful completion of the sixty hour post-licensure examination course for brokers in addition to other continuing education required to be completed by licensees in order to maintain their active and current licensure status; Requiring the Respondent David Shihada to appear before the Florida Real Estate Commission at the last meeting of the Commission preceding termination of his period of probation; and Dismissing Counts III through VI of the Administrative Complaint. DONE AND ENTERED this 21st day of November 1990 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 21st day of November 1990. APPENDIX (DOAH CASE NO. 90-4939) Rulings on Petitioner's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Finding 7. Adopted in Finding 8. 9-10. Adopted in Finding 9. 11. Adopted in Finding 10. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate P. O. Box 1900 Orlando, FL 32802-1900 John H. Duhig, Esquire 702 City National Bank 25 West Flagler Street Miami, FL 33130-1770 Kenneth E. Easley, Esquire 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller, Director Division of Real Estate P. O. Box 1900 Orlando, FL 32801
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, F.S., Chapters 120, 455, and 475, F.S., and the rules promulgated pursuant thereto. Respondent Charles B. Harvey, Jr. is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0474466 in accordance with Chapter 475, F.S. The last license issued was as a broker t/a Commercial & Investment Realty, 1116D Thomasville Road, P. O. Box 785, Tallahassee, Florida 32317. On or about April 17, 1992, Petitioner's Investigator Juanita Waller conducted a routine office/inspection audit of Respondent at 1116D Thomasville Road, Tallahassee, Florida and discovered that Respondent's trust account #077780-00242743 had an approximate shortage of $3,343.07, calculated as $29,205.00 in total trust liability but only $25,861.93 as reconciled bank balance. Thereafter, the Respondent wrote Investigator Waller and provided evidence that a portion of the missing funds was caused by an $875 "bad check" which had been deposited into his escrow account. Additionally, Investigator Waller found that Respondent failed to properly reconcile his escrow account by comparing the total trust liability with the reconciled bank balance of the trust account, as required by the rules of the Commission. Rather, he had been balancing his checkbook only. Respondent has been completely cooperative with Petitioner agency and upon notification of his errors and omissions immediately began the process of correcting the procedures used in reconciling his escrow account in accord with the requirements of the agency. He also immediately made restitution from his own monies to his escrow account as soon as he was made aware what had happened. It is noted that reconciliation of monthly written statements were not required by the agency until shortly before Respondent was investigated, however he had a duty to apprise himself of all statutes and rules and to govern himself accordingly. Likewise, he accepted "full responsibility" for allowing funds from individual clients' accounts to be used to pay for expenses incurred by other clients' properties, and has taken steps to prevent such occurrences in the future. No loss has been incurred by any party. Respondent has made good any payments owed.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That a Final Order be issued and filed by the Florida Real Estate Commission finding the Respondents not guilty of breach of trust but guilty of culpable negligence as charged in Count I of the Administrative Complaint, guilty of having failed to maintain trust funds in escrow as charged in Count II of the Administrative Complaint, and guilty of having failed to properly reconcile his escrow account as charged in County III of the Administrative Complaint and further ordering that all the Respondent's licenses, registrations, certificates and permits be reprimanded and placed on probation for a period of one year and Respondent be required to pay an administrative fine of $300 (total) within sixty (60) days of the entry of the Final Order and that before the end of the probationary period he successfully complete and provide satisfactory evidence to the Florida Real Estate Commission of having successfully completed the thirty (30) hour Brokerage Management course, these education hours to be in addition to any other professional education required by the Respondent by the licensing provisions of this state, and further providing that if all these requirements not be successfully fulfilled as required by the Final Order, then all the Respondent's licenses, registrations, certificates and permits shall be suspended until all such requirements are completed but in no event shall such suspension exceed ten (10) years. RECOMMENDED this 12th day of January, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of January, 1993. APPENDIX TO RECOMMENDED ORDER 92-6154 DOAH CASE NO. 92-6154 The following constitute specific rulings, pursuant to S120.59 (2), F.S., upon the parties' respective proposed findings of fact (PFOF) Petitioner's PFOF: 1-5 Accepted. 6 Accepted as modified. Respondent's filed no PFOF: COPIES FURNISHED: Charles B. Harvey, Esquire 1018-104 Thomasville Road Tallahassee, FL 32303 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, FL 32802 Jack McRay General Counsel 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900
The Issue Whether Respondents committed the offenses set forth in the six-count Administrative Complaint dated October 15, 2003; and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003). At all times relevant to this proceeding, Respondent Richard R. Page, was a licensed Florida real estate broker/officer, having been issued broker license no. KB-0148248. He was the qualifying broker for Aztec Realty. At all times relevant to this proceeding, Respondent Aztec Realty, was a corporation registered as a Florida real estate broker, having been issued corporate registration no. CQ-0156640. Aztec Realty's business location was 4456 Tamiami Trail, Charlotte Harbor, Florida 33980. Barbara Kiphart was a 13-year employee of the Department who had performed thousands of audits of broker records. After conducting agent interviews on an unrelated matter in the office of Aztec Realty, she informed Mr. Page that she planned to perform an audit of the corporation's escrow accounts. Ms. Kiphart testified that it was routine for the Department to perform such audits when visiting brokers' offices for other reasons. Ms. Kiphart informed Mr. Page that she would need all documents necessary to complete an audit of Aztec Realty's escrow accounts, including bank statements, account reconciliations, and liability lists. Mr. Page referred Ms. Kiphart to Cheryl Bauer, Aztec Realty's financial manager. With Ms. Bauer's assistance, Ms. Kiphart completed the audit on June 12, 2003. Three accounts were examined: the sales escrow account; the security deposit account; and the property management account. The sales escrow account was found to be in balance, with liabilities equal to the bank balance of $382,300.52. The security deposit account was found to have liabilities of $45,533.29 but only $16,429.84 in its bank balance, a shortage of $29,103.45. The property management account was found to have liabilities of $22,545.54 but only $16,594.71 in its bank balance, a shortage of $5,950.83. Ms. Kiphart testified that the security deposit account had not been reconciled in the year 2003, and she had no way of saying when it was last reconciled. She determined the account's balance from Aztec Realty's bank statements, but had to extrapolate the liabilities from a computer printout of security deposits. Ms. Bauer testified that she handles the finances for all aspects of Aztec Realty's real estate sales business, including the sales escrow account, and that she was able to provide all the information Ms. Kiphart needed to audit that account. However, Ms. Bauer had no responsibility for the other two accounts, both of which related to the rental property management side of Aztec Realty's business. She had to obtain information about those accounts from Jill Strong, her newly- hired counterpart in property management. At the time she provided the computer printout on the property management accounts to Ms. Bauer and Ms. Kiphart, Ms. Strong told them that she knew the numbers were inaccurate. Aztec Realty had purchased Tenant Pro, a new rental management software package, in 2001. In the course of approximately 18 months, Aztec Realty had three different employees in Ms. Strong's position. One of these short-term property managers had misunderstood the software for the security deposit account. Opening balances were entered for accounts that had, in fact, already been closed out with the deposits returned. This had the effect of inflating the apparent liabilities in that account. The previous property manager was also unable to print checks on the printer attached to her computer terminal. Ms. Bauer would print the deposit refund checks on her own printer, with the understanding that the property manager was recording these entries against the security deposit account. Ms. Strong discovered that these entries had not been recorded. Thus, monies that had been paid out to owners, renters, and vendors were never recorded anywhere besides a sheet that Ms. Bauer kept for printing out checks, again inflating the account's apparent liabilities. Ms. Strong had been working for Aztec Realty for about one month at the time of the audit. She was still in the process of sorting out the problems in the security deposit account, hence her statement to Ms. Bauer and Ms. Kiphart that she knew the numbers were inaccurate. Subsequent to the Department's audit, Ms. Bauer and Ms. Strong commenced their own audit of the security deposit and property management accounts. Their efforts were complicated by a storm and tornado that struck the area on June 30, 2003. The offices of Aztec Realty suffered over $100,000 in damage, including water damage to the roof that caused the office to be flooded. Records were soaked and Ms. Strong's computer was destroyed. By mid-July 2003, Ms. Bauer and Ms. Strong had completed their corrected audit of the security deposit account. They concluded that the actual shortfall in the account was $13,764.43. That amount was immediately transferred from the real estate operating account to the security deposit account to bring the latter account into balance. The real estate operating account was essentially Mr. Page's personal funds. As to the property management account, also referred to as a "rental distribution" account, Ms. Bauer and Ms. Strong performed a subsequent audit indicating that the account was out of balance on the positive side. They discovered that there were items paid out of the property management account that should have been paid from escrow and vice versa. When the audit brought the accounts into balance, the property management account was approximately $200 over balance. In an audit response letter to Ms. Kiphart dated July 16, 2003, Mr. Page acknowledged that the property management account had been improperly used to pay occasional expenses, but also stated that the practice had been discontinued. At the hearing, Mr. Page conceded that no reconciliations had been performed on the security deposit account or the property management account from at least January 2003 through May 2003. Mr. Page and Ms. Bauer each testified that the corrective actions taken in response to the audit have been maintained and that there have been no accounting problems since June 2003. Aztec Realty has contracted to sell its property management department. The evidence established that no client of Aztec Realty or other member of the public lost money due to the accounting discrepancies described above. Neither Mr. Page nor Aztec Realty has been subject to prior discipline. Mr. Page has worked in the real estate business in the Port Charlotte area for nearly 30 years and is a past president of the local association of realtors. He credibly expressed remorse and testified that, given his position in the community, he was "mortified" at having allowed his company to be placed in this position. Aztec Realty has operated for nearly 30 years and currently has 20 employees and approximately 65 agents.
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: Dismissing Counts II and III of the Administrative Complaint against Mr. Page; Dismissing Counts V and VI of the Administrative Complaint against Aztec Realty; Imposing an administrative fine against Mr. Page in the amount of $1,000 for the violation established in Count I of the Administrative Complaint; and Imposing an administrative fine against Aztec Realty in the amount of $1,000 for the violation established in Count IV of the Administrative Complaint. DONE AND ENTERED this 27th day of July, 2004, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 27th day of July, 2004.
