The Issue Whether the Respondents committed the violations alleged and, if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency charged with the responsibility of regulating real estate licensees. At all times material to the allegations of this case, Respondent, Harold E. Hicks, was licensed as a real estate broker, license number 0136248. At all times material to the allegations of this case, Mr. Hicks was the qualifying broker for the Respondent corporation, Service First Realty, Inc. (the corporation), whose address is 9715 N. W. 27th Avenue, Miami, Florida 33147. The Respondent corporation holds license number 0223295. Mr. Hicks was responsible for the day-to-day business operations of the corporation. Mr. Hicks was responsible for the financial records kept and maintained by the corporation. All financial records at issue in this proceedings were in the name of the corporation. In 1996, an investigator employed by the Petitioner, Kenneth G. Rehm, attempted to conduct an audit of the Respondents' financial records. This audit was in response to a complaint not at issue in this proceeding. Mr. Rehm went to the Respondents' place of business and asked for the financial records for all real estate accounts. Mr. Hicks provided the investigator with records which established a negative escrow bank balance of $761.00. Moreover, there was no monthly reconciliation for the escrow account. Based upon the bookkeeping method used, the Respondents' records did not show how much money was being held in trust for individual clients. Respondents pooled money for different rental properties into one escrow account without establishing that they maintained accurate ledger balances per client. When Mr. Rehm was unable to reconcile the accounts, he elected to offer Respondents additional time to gather the records and to prepare for a complete audit. Such audit was assigned to Petitioner's investigator, Roberto Castro. Mr. Castro attempted to complete the follow-up audit of Respondents' financial records on February 13, 1996. Once again, the audit was hampered due to the lack of escrow account records. Based upon the records that were provided by Respondents, Mr. Castro computed that Respondents had $3,922.45 in outstanding checks from the rental distribution trust account but only $2,241.58 in the account. This calculation resulted in a shortage of $1,680.87. Mr. Castro also determined that Respondents were not completing monthly escrow account reconciliations in accordance with the rule promulgated by the Florida Real Estate Commission. On May 3, 1996, Respondents were served with a subpoena to provide Mr. Castro with all escrow records from February 1995 to February 1996. Respondents did not respond to the subpoena. As of the date of hearing, Respondents have not shown monthly escrow account reconciliations in accordance with the rule promulgated by the Florida Real Estate Commission.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding the Respondents guilty of violating Sections 475.25(1)(b), (e), and (k), Florida Statutes, and imposing an administrative fine in the amount of $1,500.00. It is further recommended that the Commission suspend Respondents' licenses until the Respondent Hicks has completed a seven-hour course in real estate escrow management and that such suspension be followed by a probationary period with monitoring of the Respondents' financial records to assure compliance with all Commission rules. DONE AND ENTERED this 25th day of November, 1997, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 1997. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Esquire Department of Business and Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Harold E. Hicks, pro se Service First Realty, Inc. 9715 Northwest 27th Avenue Miami, Florida 33147
Findings Of Fact Petitioner is an agency of the State of Florida charged with the responsibility and duty to prosecute violations of the statutes and rules regulating the practice of real estate in the State of Florida. Respondent, Benjamin C. Rolfe, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0318091 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Rolfe was as a broker with Squires Realty of the Palm Beaches, Inc., 721 U.S. 1, #217, North Palm Beach, Florida. Respondent, Duane C. Heiser, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0038233 in accordance with Chapter 475, Florida Statutes. The last license issued to Mr. Heiser was as a broker effective February 8, 1991, at Duane C. Heiser Realty Co., 1312 Commerce Lane A1, Jupiter, Florida. On or about December 12, 1998, a Final Order was issued by the Florida Real Estate Commission and received by Mr. Heiser whereby his real estate broker's license was suspended for two (2) years from January 12, 1989, through January 10, 1991. During the month of October 1989, Mr. Heiser violated the lawful suspension order of the Commission by personally delivering rental checks to and ordering the disbursement of escrow funds from the Property Management-Operating Account, which is an escrow account, of Squire's Realty Company of the Palm Beaches, Inc. Between March 22 and March 26, 1990, the escrow account records of Mr. Rolfe, who was the qualifying broker for Squire's Realty of the Palm Beaches, Inc., were audited by Petitioner's authorized representatives. The Escrow/Trust Account Audit revealed that Respondent Rolfe failed to properly document and reconcile the Property Management-Operating Account, which is an escrow account. Mr. Rolfe was responsible for this account. Mr. Rolfe was negligent regarding the management of this escrow account by allowing a suspended licensee, Mr. Heiser, access to this account. Mr. Rolfe and Petitioner stipulated that the appropriate penalty for Mr. Rolfe's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation Mr. Rolfe would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Rolfe would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Rolfe to remain active and current as a real estate broker in the State of Florida. Mr. Heiser and Petitioner stipulated that the appropriate penalty for Mr. Heiser's violation of Section 475.25(1)(b), Florida Statutes, would be the imposition of an administrative fine in the amount of $300.00 and the placement of his licensure on probation for a period of one year. They further stipulated that the administrative fine was to be paid within thirty days of the filing of the final order. They also stipulated that during his term of probation, Mr. Heiser would be required to complete sixty hours of continuing education with thirty of those sixty hours being the thirty hour management course for brokers. They further stipulated that Mr. Heiser would be required to provide to Petitioner satisfactory evidence of his completion of those sixty hours of continuing education and that those sixty hours of continuing education are to be in addition to any other continuing education required of Mr. Heiser to remain active and current as a real estate broker in the State of Florida.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which: Dismisses Counts I, III, and V of the Administrative Complaint; Finds Mr. Heiser guilty of having violated a lawful order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), Florida Statutes, as alleged in Count II of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Heiser and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Heiser pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Heiser be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Heiser to remain active and current as a real estate broker in the State of Florida. Finds Mr. Rolfe guilty of culpable negligience in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, as alleged in Count IV of the Administrative Complaint. It is further recommended that the Final Order impose an administrative fine in the amount of $300.00 upon Mr. Rolfe and place his licensure on probation for a period of one year. It is also recommended that the conditions of probation require that Respondent Rolfe pay the said administrative fine within thirty days of the filing of the final order and that he be required to complete sixty hours of continuing education during his term of probation. It is further recommended that as part of the sixty hours of continuing education, Mr. Rolfe be required to successfully complete the thirty hour management course for brokers, that he be required to provide satisfactory evidence of completion of such continuing education to Petitioner, and that these sixty hours of continuing education be in addition to any other continuing education required of Respondent Rolfe to remain active and current as a real estate broker in the State of Florida. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 30th day of December, 1991. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 1991. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Neil F. Garfield, Esquire Garfied & Associates, P.A. World Executive Building Suite 333 3500 North State Road 7 Fort Lauderdale, Florida 33319 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
The Issue In this disciplinary proceeding, the issues are whether Respondents, who are licensed real estate brokers, failed to reconcile their brokerage escrow account properly; failed to maintain trust funds in an escrow account as required; filed a false report or record; obstructed or hindered Petitioner’s investigator in an official investigation; failed to account for and deliver trust funds; committed various acts of fraud, misrepresentation, dishonest dealing, or culpable negligence in any business transaction; or committed any of these enumerated offenses, as alleged by Petitioner in its Administrative Complaint.
Findings Of Fact The Parties Respondent Rudolph Dyer (“Dyer”) is a licensed real estate broker subject to the regulatory jurisdiction of the Florida Real Estate Commission (“Commission”). Respondent Golden Key Realty, Inc. (“Golden Key”) is and was at all times material hereto a corporation registered as a Florida real estate broker subject to the regulatory jurisdiction of the Commission. Dyer is the president and a director of Golden Key, and at all times relevant to this case he had substantial, if not exclusive, control of the corporation. Indeed, the evidence does not establish that Golden Key engaged in any conduct distinct from Dyer’s in connection with the transactions at issue. Therefore, Respondents will generally be referred to collectively as “Dyer” except when a need to distinguish between them arises. Petitioner Department of Business and Professional Regulation, Division of Real Estate, has jurisdiction over disciplinary proceedings for the Commission. At the Commission’s direction, Petitioner is authorized to prosecute administrative complaints against licensees within the Commission’s jurisdiction. Escrow Account Irregularities and Related Misconduct On or about November 14, 2001, Petitioner conducted a routine audit of Dyer’s records. Pursuant to the audit, Catherine Rivera (“Rivera”), Petitioner’s investigator, determined that as of October 31, 2001, the balance in Dyer’s escrow account was $127. Rivera determined further that Dyer’s trust liability, i.e. the total amount of money that Dyer should have been holding in escrow on his clients’ behalf, was $2,870. Thus, there existed a shortfall of $2,743 in Dyer’s escrow account. In light of this discovery, Rivera requested that Dyer provide additional records, including previous bank statements and the reconciliation statements that licensed brokers must prepare each month showing either that their trust liabilities and bank balances are in agreement or explaining why they are not. Dyer was unable to produce these records, whereupon Rivera advised him that Petitioner would initiate disciplinary proceedings. On or about April 26, 2002, after being formally notified of pending administrative charges arising from the aforementioned deficiencies concerning his escrow account and associated records, Dyer sent Rivera a letter in which he a) admitted having failed to reconcile his bank balances and trust liabilities and b) informed Rivera that “immediately after the audit [on November 14, 2001,] steps were taken to close out all escrow deposit accounts being held by the company.” In fact, Dyer continued to use his escrow account to hold funds in trust through June 2002; as it happened, the escrow account would not be completely closed until July 29, 2002. The undersigned is not convinced, however, that Dyer lied to Petitioner about closing the escrow account, as Petitioner here contends. Rather, given the ambiguity of the language used (“steps were taken”), the undersigned accepts Dyer’s explanation that what he intended to communicate was that activity in the escrow account was being allowed to wind down in an orderly fashion——which was substantially true. Continuing to investigate the matter, Rivera arranged to meet with Dyer at his office on June 19, 2002, to review the previously requested bank records and files. When Rivera arrived on that date, however, Dyer again failed to provide the desired documents. As a result, Rivera scheduled yet another appointment to inspect records at Dyer’s office. The next such meeting would take place on July 29, 2002. In the meantime, Petitioner served a subpoena duces tecum on Dyer’s bank and obtained a complete set of bank records, including canceled checks, pertaining to Dyer’s escrow account. On July 29, 2002, Dyer finally provided reconciliation statements for his escrow account pursuant to Rivera’s longstanding request. These statements were self-contradictory and woefully inadequate, but, if nothing else, they clearly demonstrated (and the undersigned finds) that the escrow account balance fell significantly short of Dyer’s total trust liability during the months of May through August 2001, inclusive. Indeed, there is no dispute (for Dyer admitted at final hearing), and it is hereby found, that at all times relevant to this case, Dyer was commingling trust funds with other funds, to the point that the escrow account effectively became an operating account of Golden Key. Dyer also produced documents purporting to be copies of checks drawn on his escrow account. At least seven of these copies were not genuine reproductions of the respective originals but were, instead, fakes.1 Specifically, in five instances, the payee of an escrow-account check was, according to the copies that Dyer produced, an individual whom, the inference is clear, Dyer owed escrowed funds. In reality, each such check actually had been made payable to and been uttered by Golden Key, which latter facts are irrefutably established by the bank-produced records.2 Dyer admitted that the above-described copies of checks he had produced to Petitioner were fakes, but he denied having personally altered the underlying documents to create the false copies, blaming an unnamed accountant for that misdeed, and he disclaimed advance knowledge of the tampering. The undersigned, however, does not fully believe Dyer’s explanation. Dyer had exclusive authority over the escrow account and substantial control over Golden Key’s operations. The undersigned finds it inconceivable that a stranger to the subject transactions could have knowingly falsified these particular checks, in the manner shown, without Dyer’s active assistance. Therefore, while acknowledging the possibility that Dyer himself might not have altered the documents in question, the undersigned finds that he was, at the very least, aware of and knowingly complicit in the attempted deception. The Fanfan Transactions On or about June 13, 2001, Dyer facilitated a contract between Herinslake, as seller, and Francique Fanfan (“Fanfan”), as buyer, for the purchase and sale of real property commonly known as 5435 Northwest Tenth Street, Plantation, Florida. The contract called for an initial deposit of $500 and an additional deposit of $500 to be placed with Dyer within ten days after the buyer’s acceptance. Dyer received $500 from Fanfan on June 19, 2001. In evidence as Petitioner’s Exhibit 9 is a $500 money order dated June 18, 2001, which names the sender (maker) as “Fan Fan” and lists as his address “601 W Oakland Pk Blvd, Ft Lauderdale 33311.” The undersigned infers that Petitioner’s Exhibit 9 is, in fact, a copy of the money order that Fanfan tendered to Dyer on June 19, 2001, as a deposit on the contract to purchase property from Herinslake. Petitioner alleges (and Dyer disputes) that some time after June 19, 2001, Dyer collected the agreed-upon second $500 deposit from Fanfan, making a total of $1,000 being held in escrow on Fanfan’s behalf. Petitioner asserts that Petitioner’s Exhibit 7, which is a $500 money order dated July 9, 2001, payable to Golden Key, is proof of the second deposit. Petitioner further alleges that after the contract between Herinslake and Fanfan failed to close (which is undisputed), Dyer returned $500 to Fanfan and kept $500 (which is disputed). Taken together, the testimony of Dyer and that of his former salesman, Elysee Joseph, is imprecise, confusing, and somewhat in conflict as it relates to Fanfan. They agree, however, that when the Herinslake-Fanfan transaction fell apart, Dyer returned Fanfan’s entire deposit——of $500. Dyer also points out that months later he assisted Fanfan in the purchase of a condominium unit located at 2800 Northwest Fifty-Sixth Avenue, Lauderhill, Florida. His testimony is corroborated by the settlement statement from that transaction, which is in evidence as part of Petitioner’s Exhibit 11. The settlement statement identifies the seller as Evelyn Goodison; names Francique Fanfan, “a single man,” as buyer; and indicates that the transaction closed on April 10, 2002. According to the settlement statement, Fanfan had placed a $1,000 deposit against the purchase price, and the testimony at final hearing established that Dyer had held this sum in escrow pending the closing. The undersigned finds that Petitioner has failed to prove, clearly and convincingly, that Dyer retained $500 belonging to Fanfan in connection with the aborted contract between Herinslake and Fanfan, for several reasons. First, the money order dated July 9, 2001, a copy of which is in evidence as Petitioner’s Exhibit 7, appears not to have been tendered by Francique Fanfan, the alleged victim here. This particular money order identifies the sender as “Michelle Fanfan” and gives as her address “2076 Kimberly Blvd, N Lauderdale, Fl 33068.” There is no evidence whatsoever in the record regarding Michelle Fanfan, and hence no finding can be made that she was in any way related to Francique Fanfan, who (the evidence shows) was a single man. Moreover, Michelle Fanfan’s address does not match Francique Fanfan’s address as reported in Petitioner’s Exhibit 9. Second, the undersigned believes that it is highly unlikely Fanfan would have continued to do business with Dyer if, as Petitioner alleges, Dyer had cheated him out of $500 on an earlier deal. Thus, the very fact that Fanfan purchased the Goodison property through Dyer tends to refute Petitioner’s charge. Finally, Fanfan, the alleged victim, did not testify at the final hearing, and consequently there is no direct evidence that Dyer took $500 from Fanfan. The Charges In counts I and VII of its Administrative Complaint, Petitioner accuses Respondents of having failed to properly prepare monthly escrow-reconciliation statements. Petitioner’s position is that in maintaining records showing significant shortages in the escrow account for a period of approximately six months, and by failing to take corrective action regarding the shortages, Respondents failed to comply with Rule 61J2- 14.012, Florida Administrative Code, and hence violated Section 475.25(1)(e), Florida Statutes. In counts II and VIII, Petitioner alleges that Respondents committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b), Florida Statutes. Petitioner’s position is that Respondents committed fraud or misrepresentation when they tendered false or forged documents to Rivera during the course of her official investigation. In addition, Petitioner asserts that Respondents committed culpable negligence towards the individuals who placed their funds in trust with Respondents. In counts III and IX, Petitioner asserts that Respondents obstructed or hindered the enforcement of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(i), Florida Statutes, and therefore in violation of Section 475.25(1)(e), Florida Statutes. Petitioner’s position is that Respondents willfully interfered with Rivera’s investigation by submitting fraudulent documents to the investigator. In counts IV and X, Petitioner accuses Respondents of having made or filed a report or record which the licensee knew to be false, in violation of Section 475.25(1)(l), Florida Statutes. Petitioner’s position is that Respondents knowingly tendered false copies of canceled checks to Rivera. In counts V and XI, Petitioner charges Respondents with failing to account for and deliver trust funds, in violation of Section 475.25(1)(d)1., Florida Statutes. Petitioner’s position is that Respondents failed to account for and deliver the second deposit allegedly received from Fanfan in connection with the Herinslake-Fanfan transaction. In counts VI and XII, Petitioner accuses Respondents of having failed to maintain trust funds in the real estate brokerage escrow account until disbursement was properly authorized, in violation of Section 475.25(1)(k), Florida Statutes. Petitioner’s position is that during the six months of concern, Respondents’ escrow account funds were regularly several thousand dollars less than the trust liability. Ultimate Factual Determinations Dyer failed to prepare written monthly reconciliation statements as required by Rule 61J2-14.012, Florida Administrative Code, and thus he violated Section 475.25(1)(e), Florida Statutes. Petitioner therefore has established the charges set forth in counts I and VII of its Administrative Complaint, by clear and convincing evidence. The evidence does not establish that Dyer committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. There is no persuasive evidence that Dyer intended to harm (or actually harmed) any of his clients. While Dyer did participate in a dishonest scheme to deceive Rivera by producing false copies of his canceled checks, this particular wrongdoing occurred, not in a business transaction, but rather in connection with a regulatory investigation. Thus, Dyer did not violate Section 475.25(1)(b), Florida Statutes. Counts II and VIII were not proved. Dyer attempted to obstruct or hinder Rivera’s investigation by producing copies of canceled checks that he knew were false and misleading. Petitioner has clearly established that Dyer violated Section 475.42(1)(i), Florida Statutes, which in turn constitutes a violation of Section 475.25(1)(e), Florida Statutes, as charged in counts III and IX of the Administrative Complaint. The evidence does not support the charge that Dyer violated Section 475.25(1)(l), Florida Statutes, which prohibits the filing false reports and records, because the altered documents that Dyer produced to Rivera were not signed by Dyer—— at least not in the sense contemplated by the statute, which specifies that “such reports or records shall include only those which are signed in the capacity of a licensed broker or salesperson.” Counts IV and X thus were not proved. The evidence does not clearly establish that Dyer failed to return a deposit of $500 to Fanfan after his deal with Herinslake fell through. Thus, counts V and XI, which allege violations of Section 475.25(1)(d)1., Florida Statutes, were not proved. Dyer failed to maintain trust funds in a segregated escrow account, in violation of Section 475.25(1)(k), Florida Statutes. Petitioner therefore has established the charges set forth in counts VI and XII of its Administrative Complaint, by clear and convincing evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order that: (a) finds Respondents guilty as charged in counts I, III, VI, VII, IX, and XII of the Administrative Complaint; (b) revokes Respondents’ respective real estate licenses; and (c) imposes an administrative fine of $3,000 against Respondents, jointly and severally. DONE AND ENTERED this 11th day of June, 2003, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 11th day of June, 2003.
The Issue The issue in this case is whether the real estate license issued to the Respondent, James P. Hudson, should be revoked or otherwise disciplined based upon the acts alleged in the Administrative Complaint.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I make the following findings of fact: At all pertinent times, Respondent, James P. Hudson, was a licensed real estate broker in the State of Florida having been issued license No. 0148841 in accordance with Chapter 475, Florida Statutes. Respondent has been operating as a broker from an office at 413 South Federal Highway, Boynton Beach, Florida 33435. Respondent maintains an escrow account No. 018200602689 at Sun Bank in Boynton Beach, Florida into which he deposits trusts funds received in his capacity as a real estate broker. Sometime in the early part of September 1989, Petitioner initiated a random audit of Respondent's business. Prior to the audit, Petitioner's investigator advised the Respondent that he would need to produce all the records related to his escrow account. An investigator for Petitioner visited Respondent's office on or about September 18, 1989 to conduct an audit of Respondent's escrow accounts. Based upon the investigator's review of the records, five different transactions were identified as allegedly involving delays or mishandling of escrow funds by Respondent. Those transactions are the basis for several of the allegations in the Administrative Complaint. Each transaction is addressed separately below. The first transaction involved a contract for the sale and purchase of real property between Fitz as buyer and Kerstin as seller (the "Fitz Contract"). Included in Respondent's files on this transaction was a copy of a contract for sale and purchase that was dated and signed by the buyer on September 6, 1989 and dated and signed by the seller on September 9, 1989. The buyer in the Fitz Contract gave Respondent a check for $1000 as a deposit to be held in escrow in connection with the transaction. The Respondent's written receipt for that check is dated September 7, 1989. The evidence established that this initial deposit check was delivered to Respondent on Thursday evening, September 7, 1989. Respondent was out of town on Friday, September 8 and returned on Monday evening, September 11. The check was deposited on the afternoon of September 12 and is reflected in the bank records as a deposit on September 13. The sellers (the Kerstins) signed the contract on September 9, 1989. However, in executing the contract, they crossed out the $900,000 sales price submitted by the buyer and increased the price to $1,400,000. In other words, the sellers made a counteroffer with respect to this contract. The initial deposit was timely returned to the sellers when the counteroffer was rejected. Petitioner's investigator erroneously assumed that Respondent did not timely collect the additional deposit required under this contract. While Petitioner's investigator considered this signed contract in Respondent's files to be a binding agreement on the parties, it is clear that the change in sales price was only initialed by the sellers and, therefore, there was no enforceable agreement. The parties to the Fitz Contract subsequently executed another written contract. This second agreement provided for a sales price of $1,100,000. That contract was executed by the buyer on September 20, 1989 and by the sellers on September 24, 1989. This second contract called for a $49,000.00 deposit upon acceptance. The buyers gave Respondent a check dated September 25, 1989 in the amount of $49,000.00. That check was deposited by Respondent in his escrow account on the afternoon of September 26, 1989. The $49,000 deposit is reflected in the bank records as being deposited on September 27, 1989. Under the circumstances, there was no undue delay by Respondent in collecting or depositing the funds into escrow. The second transaction identified by Petitioner's investigator involved a contract for the sale and purchase of real property between Campanis as buyer and Hoffman as seller. The buyer in this transaction gave Respondent a check dated September 6, 1990 to be held as a deposit for this contract. A photocopy of the check presented to Petitioner's investigator included a handwritten note that states "hold until Friday 9/8/89." The evidence did not establish who wrote this note. The evidence established that the check was received by one of Respondent's sales associates on September 7 and left on the Respondent's desk on September 8. Respondent is the only company employee authorized to deposit checks or otherwise handle transactions involving the escrow account. As indicated above, Respondent was out of town from September 8 through the evening of September 11. The check was deposited on the afternoon of September 12 and is reflected in the bank records as being credited to the escrow account on September 13. Under the circumstances, the Respondent was not delinquent in depositing these funds. The third transaction involved a contract for the purchase and sale of real property between White as buyer and Adkins as seller (the "White Contract.") The White Contract was executed by the buyer on July 26, 1989 and by one of the sellers on July 27 and by the other seller on Friday, July 28. The contract called for an initial deposit of $500.00 with an additional deposit of $1,700 upon acceptance. The initial deposit check was dated July 26, 1989. That deposit check was attached to the contract executed by the purchaser and presented to a cooperating real estate agent who was to present the proposed contract to the seller. The executed contract was not returned to Respondent until sometime during the weekend of July 29 and 30. The initial deposit check along with the additional deposit were then deposited into Respondent's escrow account on Monday, July 31, 1989. Under the circumstances, the evidence established that there was no undue delay in depositing the escrow money. The next transaction identified by Petitioner's investigator involved a contract for sale and purchase of real property between Milera as buyer and Twillie as seller (the "Milera Contract.") The Milera Contract provided for an additional deposit due upon acceptance. The contract was accepted by Twillie on August 23, 1989. The parties to the contract agreed that the time for making the additional deposit would be extended for two days. The check for the additional deposit was dated and received by Respondent on Friday, August 25, 1989. The check was deposited into Respondent's escrow account on Tuesday, August 29, 1989. Under the circumstances, there was no undue delay in depositing the escrow money. The final transaction involved a contract with the sale and purchase of real property between Gerrety as buyer and the estate of John Walsh as seller (the "Gerrety Contract.") The Gerrety Contract was executed by the purchaser on August 10, 1989. The deposit check was given to one of the Respondent's associates on that Thursday evening. The deposit check was not delivered to Respondent until after business hours on Friday, August 11. The check was deposited into Respondent's escrow account on Monday, August 14. Under the circumstances, there was no undue delay in depositing the escrow money on this transaction. During the audit, Petitioner's investigator determined that Respondent was holding deposits on two separate rental properties in his escrow account. At the time of the audit, Petitioner's investigator was not provided with any leases or other documentation regarding these transactions even though Respondent was supposed to produce records for all sums in the escrow account. Respondent contends that he did not realize he was supposed to produce his rental files, was never specifically asked to produce these files and did not know that Petitioner was questioning these transactions until he received the Administrative Complaint in this action. While there was apparently some miscommunication at the time of the audit, adequate documentation for these rental deposits was produced at the hearing. Therefore, Petitioner's allegation that Respondent did not maintain adequate documentation regarding these deposits is without merit. Petitioner has also charged that Respondent did not produce all of the deposit slips in connection with the escrow account and did not produce any evidence of reconciliation of the escrow account. The evidence at the hearing established that all deposit slips are available even though they were not all kept with the bank statements. Moreover, the evidence failed to substantiate the allegation that Respondent did not reconcile his escrow account. Thus, these charges were not substantiated. At the time of the audit, Respondent advised Petitioner's investigator that the escrow account included some commission money that had not yet been removed. In the past, Respondent would sometimes collect his commissions at the close of a transaction from the funds held in escrow. (Respondent no longer collects commissions in this manner.) In auditing Respondent's escrow account, Petitioner's investigator determined that there was an overage of approximately $8,178.17 in the account. Within thirty days of the completion of the audit, Respondent removed $7,500 of the overage which represented his commission on two previously closed transactions. While Respondent believed that the remaining amount of the overage was also his commission money, he refrained from removing any more money until completion of a year-end audit by his accountant. Respondent's records reflected a slight difference in the amount of the overage than the amount calculated by Petitioner during the audit. Respondent wanted to be absolutely certain that only the proper amount was removed from the escrow account. At the conclusion of the audit on September 18, 1989, Respondent signed an office inspection report form prepared by Petitioner which contained the following pre-printed statement: ...I certify that to the best of my knowledge all records pertaining to my sales escrow/trust account(s) and my rental property management account(s) have been provided to the investigator. The above violations are brought to my attention this date and thoroughly explained. I will take corrective action within thirty days and furnish photo/sketches of corrections and documents on the same... There is some confusion as to what additional documentation Respondent was expected to provide following the completion of the September, 1989 audit. Respondent did not believe he was required to provide any additional evidence to Petitioner or its investigator and no further documentation was provided by Respondent until Petitioner's investigator returned to his office in January of 1990. Petitioner's investigator returned to Respondent's office on January 17, 1990. At that time, $7500.00 of the overage had been removed from the escrow account. The remaining amount of the overage was removed later in January. It does not appear that Respondent provided Petitioner's investigator with copies of the rental agreements or the second contract in the Kerstin transaction during the January visit by Petitioner's investigator. Respondent contends that this information was never specifically requested. It is clear that communication between Respondent and Petitioner's investigator had deteriorated from bad to worse by the time of this January visit. There is no indication that Respondent ever used the escrow account for improper purposes or withdrew money from the escrow account for his own personal or business use. The Florida Real Estate Commission adopted new record keeping requirements regarding escrow accounts in July of 1989. The new rules require a written monthly reconciliation of a broker's escrow account. At the time of the audit, Respondent was not keeping the minimum written statement comparing broker's total liability with the reconciled bank balance of all trust accounts as required by the new rules. Even after the audit in September, Respondent did not keep the written reconciliations in the format required by the new rules. Respondent was reconciling the account on his computer.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner enter a Final Order finding Respondent not guilty of the allegations contained in Counts I and II of the Administrative Complaint, finding Respondent guilty of Counts III and IV and reprimanding him for minor and techinical violations of those counts and imposing a fine of $100.00. RECOMMENDED in Tallahassee, Leon County, Florida, this 31st day of December, 1991. J. STEPHEN MENTON 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 31st day of December, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3589 Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on each of the parties' proposed findings of fact. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Addressed in the preliminary statement. Adopted in substance in Findings of Fact 1. Adopted in pertinenet part in Findings of Fact 3. Rejected as irrelevant. Rejected as irrelevant. Adopted in substance in Findings of Fact 4. 7. Subordinate to Findings of Fact 5. 8. Subordinate to Findings of Fact 6. 9. Subordinate to Findings of Fact 7 and 8. 10. Subordinate to Findings of Fact 6. 11. Subordinate to Findings of Fact 6. 12. Subordinate to Findings of Fact 8 and 9. 13. Subordinate to Findings of Fact 8 and 9. 14. Subordinate to Findings of Fact 8 and 9. 15. Subordinate 23. to Findings of Fact 8, 9 and Subordinate to Findings of Fact 23. This subject is also addressed in paragraph 9 of the conclusions of law. Adopted in substance in Findings of Fact 10. Adopted in substance in Findings of Fact 10. 19. Subordinate to Findings of Fact 11. 20. Subordinate to Findings of Fact 13. 21. Subordinate to Findings of Fact 13. 22. Subordinate to Findings of Fact 13. 23. Subordinate to Findings of Fact 14. 24. Subordinate to Findings of Fact 14. 25. Subordinate to Findings of Fact 15. 26. Subordinate to Findings of Fact 15. Subordinate to Findings of Fact 16. Subordinate to Findings of Fact 17. Rejected as not established by competent susbstantial evidence. The subject matter is addressed in Findigns of Fact 17. Adopted in substance in Findings of Fact 19 and 20. Rejected as not established by competent substantial evidence. The subject matter is addressed to some degree in Findings of Fact 21. Subordinate to Findings of Fact 21 and 22. Subordinate to Findings of Fact 21 and 25. Adopted in substance in Findings of Fact 20. Rejected as irrelevant. Subordinate to Findings of Fact 21. Subordinate to Findings of Fact 21. The Respondent's Proposed Findings of Fact The Respondent's proposed findings of fact are not numbered. The numbers below refer to the numerical sections contained in the findings of fact section of Respondent's Proposed Recommended Order. Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. The first two sentences are adopted in substance in Findings of Fact 6-9. The second two sentences are rejected as irrelevant. This subject matter is addressed in some degree in Findings of Fact 21. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentencess are subordinate to Findings of Fact 10. The next two sentences are adopted in substance in Findings of Fact 11. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentence are adopted in substance in Findings of Fact 13. The third sentence is rejected as constituting argument rather than a finding of fact. The first three sentences are adopted in substance in Findings of Fact 14. The last sentence is rejected as constituting argument rather than a finding of fact. The first two sentences are adopted in substance in Findings of Fact 15. The last sentence is rejected as constituting argument rather than a finding of fact. Adopted in substance in Findings of Fact 16. The first sentence is adopted in substance in Findings of Fact 17. The second sentence is rejected as vague. Subordinate to Findings of Fact 17 and 25. The first three sentences are adopted in substance in Findings of Fact 18, 19 and 22. The fourth sentence is rejected as not established by competent substantial evidence. This subject matter is addressed in part in Findings of Fact 19. The fifth and sixth sentences are rejected as constituting argument rather than a finding of fact. Subordinate to Findings of Fact 25. COPIES FURNISHED: Janine B. Myrick, Esquire Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802 James P. Hudson 413 South Federal Highway Boynton Beach, Florida 33435 Darlene F. Keller Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Respondent was at all times material to this proceeding a licensed real estate broker in the state of Florida having been issued license number 0035275. The last license issued was as a broker, d/b/a Silver Springs Real Estate, Corp., 4121 East Silver Springs Boulevard, Ocala, Florida 32671. On or about August 3, 1984, the Respondent obtained Teri L. Lochman (Lochman) as a tenant of certain residential property belonging to Gail and Valerie Cox (Cox) that was involved in a sale to A. Pillot. In connection with this sale, a lease had been prepared between A. Pillot as Lessor and A. Alongi as Lessee. Lochman signed this lease as Lessee, and in connection with this lease, paid Respondent $1,600.00 representing $700.00 for the first month's rent, $700.00 for the last month's rent and $200.00 security deposit. These funds were paid by Lochman to Respondent in two separate checks in the amount of $500.00 and $1,100.00 dated August 5, 1984 and August 13, 1984, respectively. The Pillot/Cox escrow account, which had previously been established in Respondent's escrow ledger, was credited with these funds and the funds deposited in Respondent's real estate brokerage trust bank account, No. 805 0006583, in the Sun Bank of Ocala (Trust Account), on August 9, 1984 and August 17, 1984, respectively. Upon attempting to move into the home she had rented, Lochman discovered that Cox was still in possession because the sale had not gone through. At this point, August 17, 1984, Lochman and Cox signed an agreement which would allow Lochman to reside in the home rent free for two weeks while Cox was out of town in return for acting as a security guard. Sometime after the August 17, 1987 agreement was executed by Lochman and Cox, Lochman and Cox signed a handwritten month to month lease of the premises requiring Lochman to pay Cox $700.00 for the first month's rent, $700.00 for the last month's rent and a $200.00 damage deposit. This payment was conditioned upon Lochman receiving her refund from the Respondent. There was no credible evidence that Respondent agreed to release Cox from any previous agreement with Respondent wherein Respondent acted as agent for Cox in obtaining Lochman as a tenant or the handling of Cox's property, i.e. mowing grass or preparing house for rent. Additionally, there was no credible evidence that Respondent agreed to Lochman dealing directly with Cox. Respondent was at all times relevant to this proceeding acting as agent for Cox, and therefore, demanded from Cox her commission for obtaining Lochman as a tenant and reimbursement for other services rendered before returning Lochman's rental deposit. There is no credible evidence that the Respondent agreed to return Lochman's rental deposit without first obtaining her commission or reimbursement for other services rendered from Cox. There is no credible evidence to show that Cox paid Respondent her commission or reimbursed Respondent for other services rendered or that Cox made a demand on Respondent to pay the Lochman rental deposit to Lochman. There is credible evidence that Lochman made a demand on Respondent for the return of her rental deposit and that Respondent refused to return Lochman's rental deposit because there was a dispute between Respondent and Cox concerning Respondent's commission and reimbursement for other services rendered. Lochman did not pay Cox the rent for the month of September, 1984, therefore, she contends that Respondent only owes her $900.00 of the rental deposit. Upon Respondent's refusal to pay her the balance of the rental deposit, Lochman obtained a default judgment for $900.00 in civil court, however, and although the record is not clear, the default judgment may have been set aside. (See transcript, page 15, lines 9-13). The evidence is clear that check no. 257 drawn on the Trust Account in the amount of $1,465.00, paid on April 18, 1985, included $1,278.00 from the Pillot/Cox escrow account and depleted the funds in the Pillot/Cox escrow account. However, there was no evidence presented to show that the Lochman rental deposit was paid to Respondent. Likewise, there was no evidence presented to show that Cox did not receive the Lochman rental deposit. There was no evidence presented to show the payee on Check No. 257, or any other check, drawn on the Trust Account. There was no evidence presented to show that Respondent commingled trust funds and personal funds in the Trust Account in regard to deposits and withdrawals. There was insufficient credible evidence to show that Lochman was entitled to delivery of $900.00 or any funds from the Trust Account. There was no evidence that Respondent notified the Real Estate Commission (Commission) of the conflicting demands on the Lochman rental deposit or followed any of the procedures set forth in the statutes to resolve such a conflict.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Commission enter a Final Order finding the Respondent guilty of failing to notify the Commission of the conflicting demands on the trust funds and failing to follow the procedures set forth for resolving such conflict in violation of Section 475.25(1)(d), Florida Statutes and that Respondent's real estate broker's license be suspended for a period of six (6) months, stay the suspension, place the Respondent on probation for a period of six (6) months under the condition that the issue of conflicting demands on the trust funds be resolved within sixty (60) days and under any other conditions the Commission feels appropriate, and assess an administrative fine of $300.00 to be paid within sixty (60) days of the date of the Final Order. It is further RECOMMENDED that the Final Order DISMISS Counts I, III, IV and V of the Administrative Complaint filed herein. Respectfully submitted and entered this 1st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 1st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2387 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner 1.-2. Adopted in Finding of Fact 1. 3. Adopted in Findings of Fact 8 and 9. 4.5 Rejected as not supported by substantial competent evidence in the record. Additionally, Petitioner has treated certain facts in this case as background in unnumbered paragraphs which I have numbered 6-10. Adopted in Finding of Fact 2 as clarified. Adopted in Finding of Fact 4 except for the phrase that Respondent agreed to the return of the rental deposit which is rejected as not being supported by substantial competent evidence in the record. I did not find Lochman's testimony credible in this regard. Adopted in Findings of Fact 8 and 9 as clarified. Adopted in Finding of Fact 10 as clarified. This paragraph is a statement of Lochman's testimony and not presented as a fact, therefore, is rejected. Rulings on Proposed Findings of Fact Submitted by the Respondent For the reasons set forth in the Background portions of this Recommended Order, there has been no rulings of Respondent's Proposed Findings of Fact. COPIES FURNISHED: Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jeffrey J. Fitos, Esquire Valley Forge Military Academy Wayne, Pennsylvania 19087
The Issue Whether the Respondents' Florida real estate licenses should be disciplined based upon the following charges, as alleged in the administrative complaint: COUNTS I and II: Whether Respondent Richard Michael Regazzi ("Regazzi") is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes. COUNT III: Whether Respondent Regazzi is guilty of failure to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. COUNT IV: Whether Respondent Atlantic Rentals Realty, Inc. is guilty of failure to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. COUNT V: Whether Respondent Regazzi is guilty of failure to prepare the required written monthly escrow statement- reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes. COUNT VI: Whether Respondent Atlantic Rentals, Inc. is guilty of failure to prepare the required written monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes. COUNT VII: Whether Respondent Regazzi is guilty of having been found guilty for a third time of misconduct that warrants his suspension or has been found guilty of a course of conduct or practices which shows that he is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom he may sustain a confidential relation, may not safely be entrusted to him in violation of Section 475.25(1)(o), Florida Statutes.
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaint pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, and Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent Regazzi is, and was at all times material hereto, a licensed Florida real estate broker. License number 0273453 was issued in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker in care of Atlantic Rentals, Inc., 6811 North Atlantic Avenue, No. B, Cape Canaveral, Florida. Respondent Atlantic Rentals, Inc. is, and was at all times material hereto, a corporation registered as a Florida real estate broker having been issued license number 0273444 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 6811 North Atlantic Avenue, No. B, Cape Canaveral, Florida. At all times material hereto, Respondent Regazzi was licensed and operating as the qualifying broker and officer of Respondent Atlantic Rentals, Inc. On January 28, 1997, Petitioner's Investigator Maria Ventura ("Investigator Ventura") conducted an audit of Respondents' escrow account #3601612291, maintained at NationsBank and titled Atlantic Rentals, Inc., Multi Unit escrow Account (escrow account). On January 28, 1997, Respondents had a reconciled bank balance of $46,166.93. As of January 28, 1997, Investigator Ventura determined that Respondents had a total trust liability of $84,586.77. By comparing Respondents' reconciled bank balance with Respondents' trust liability, it was determined that Respondents had a shortage of $38,419.84 in their escrow account. In addition, Respondents were not performing monthly reconciliations of their escrow account. On January 28, 1997, Respondent Regazzi prepared a monthly reconciliation statement (reconciliation statement) for December 1996, and provided it to Petitioner on the same day. Respondent Regazzi's reconciliation statement indicated that there was shortage of $28,885.36 in the escrow account. Respondent Regazzi's reconciliation statement is not signed, and does not indicate what month was being reconciled. The statement indicates that the reconciled bank balance and trust liability agree when, in fact, the reconciliation statement indicates a shortage of $28,885.36. Respondent Regazzi's explanation of how the funds were removed from the escrow account by a third party is not credible. Even if this account were credible, it does not lessen Respondent Regazzi's culpability. On April 21, 1992, the Florida Real Estate Commission ("FREC") issued a final order whereby Respondent Regazzi was found guilty of misconduct and was fined $200, and placed on probation for one year with a requirement to complete and provide satisfactory evidence to the Department of having completed an approved 30-hour broker management course. Respondent successfully completed the terms of probation. On November 12, 1996, the FREC issued a final order whereby Respondent Regazzi was fined $250 for misconduct and Respondent Atlantic Rentals, Inc. was reprimanded.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent Regazzi be found guilty of violating Sections 475.25(1)(b), (e), (k), and (o), Florida Statutes (1995), as charged in the Administrative Complaint. Respondent Atlantic Rentals, Inc. be found guilty of having violated Sections 475.25(1)(b), (k), and (e), Florida Statutes, as charged in the Administrative Complaint. That Respondents Regazzi's real estate license be revoked and that he be ordered to pay restitution in the amount of $38,419.84, plus interest. That Respondent Atlantic Rentals, Inc.'s corporate brokerage registration be revoked. RECOMMENDED this 23rd day of December, 1997, at Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 1997. COPIES FURNISHED: Daniel Villazon, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N-308 Orlando, Florida 32801 Richard Michael Regazzi, pro se Atlantic Rentals, Inc. 6811-B North Atlantic Avenue Cape Canaveral, Florida 32920 Henry M. Solares, Division Director Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact The Department rules on the Proposed Findings of Facts and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Findings numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, and 29 are accepted to the extent that they are not inconsistent with the Findings of Fact rendered by the Hearing Officer. Applicant's Proposed Finding number 22 is accepted to the extent that factual matters are discussed. However, to the extent that it suggests that "public convenience and advantage" will be promoted by establishment of the trust company, the Department rejects this conclusionary statement as inconsistent with the Department's conclusion as to this criterion based on the reasons as discussed in paragraph three (3) contained in the Conclusions of Law of the Final Order. Applicant's Proposed Finding number 25 concerning the telephone survey has been dealt with in the Hearing Officer's Finding number 13, as adopted by the Department. Applicant's Proposed Finding number 26 concerns several counter- arguments addressing contentions proposed by the Protestants. As to (1) "Concentration", (2) "Dual Banking", and (3) "Siphoning of Capital". To the extent that no significant findings of fact, if any, were premised on these contentions, there is no necessity to respond. A portion of the Hearing Officer's Finding of Fact number 10, was excepted to, concerning the "concentration" argument, and will be treated below in paragraph 9. Number 4 concerning injury to existing institutions has been dealt with in the Final Order in paragraph 4 of the Conclusions of Law, as to the "reasonable promise". The Applicant's Conclusions of Law numbers 1, 4, 5, 6, 7 are accepted. Numbers 2, 3, and 8 are rejected as contrary to the Conclusions of the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS Protestant's Proposed Findings numbers 1, 2, 3, 4, 5, 13, 18, 19, 20, 21, 23, 29, 30, 34, and 35 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings or with the Final Order. Protestant's Proposed Findings numbers 6, 7, 8, 9, 10, 12, 14, 15, 16, 17, 22, 24, 25, 26, 27, 28, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings or with this Final Order, or are otherwise irrelevant or immaterial. APPLICANT'S EXCEPTIONS The Applicant's Exceptions numbers 1, 2, 3, 4, 5, 6, and 10 concern Proposed Findings that were not specifically referenced in the Hearing Officer's Report. However, they are generally consistent with the Hearing Officer's Findings and have been accepted by the Department to the extent that they are consistent with the Final Order. Exception 7, concerning Proposed Finding number 18, has been discussed above in paragraph 1. Exception 8, concerning Proposed Finding number 22, has been discussed above in paragraph 2. Exception number 9, concerning objection to portions of Finding of Fact number 10, is rejected. The first sentence of the Finding may speak in terms of "national trust business", but is viewed in terms of trust business throughout the nation. In no wise does it imply that there is a national market for personal trust business. The language should be viewed in the context of the overall finding. Exception number 10 is duly noted and reflected in the Final Order. Exception number 11 has been addressed in the Final Order in paragraph 4 of the Conclusions of Law as to "resonable promise." CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance and that a true and correct copy of the foregoing was sent by Certified U.S. Mail, Return Receipt Requested, to: Thomas J. Cardwell, Esquire, Post Office Box 231, Orlando, Florida 32802; Robert A. White, Esquire, Aubrey Kendall, Esquire, and Paul Brenner, Esquire of the firm Mershon, Sawyer, Johnston, Dunwoody and Cole, 1600 Southeast First National Bank Building, Miami, Florida 33131; Howard A. Setlin, Esquire, 1111 Lincoln Road Mall, Suite 600, Miami Beach, Florida 33139; Bruce Culpepper, Esquire, 350 East College Avenue, Tallahassee, Florida 32301; Robert Asti, Esquire, 2400 First Federal Building, Miami, Florida 33131; Richard R. Paige, Esquire, Alfred I. DuPont Building, Miami, Florida 33131; Charles Cane, Esquire, 801 Hallandale Beach Boulevard, Hallandale, Florida 33009; and G. Kenneth Kemper, Esquire, 9999 N.E. 2nd Avenue, Suite 200, Miami Shores, Florida 33138, on this 24 day of January, 1980. FRANKLYN J. WOLLETT Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 (904) 488-9886
The Issue Whether Respondents' license as real estate brokers in the state of Florida should be revoked, suspended or otherwise disciplined based upon the allegations of misconduct in the Administrative Complaint.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: At all times material to this proceeding, the Respondent, Deering, was licensed as a real estate broker in the state of Florida, having been issued license number 0563366. At all times material to this proceeding, Respondent, Advantage, was licensed as a real estate broker, having been issued license number 0273342. At all times material to this proceeding, Respondent, Deering, was licensed and operating as the qualifying broker for Respondent, Advantage. On October 22, 1992, Petitioner conducted an office inspection and audit of Advantage. The audit reflected what appeared to be a shortage in Advantage's security deposit escrow account (Number 027000122700) in the amount of $580.00, calculated as $6,600.00 in total trust liability, but only $6,020.00 as a reconciled bank balance. The audit also reflected what appeared to be a shortage in Advantage's rental distribution escrow account (Number 27000121900) in the amount of $369.40, calculated as $3,174.82 in total trust liability, but only $2,805.42 as reconciled bank balance. The audit also reflected that Deering, as the qualifying broker, failed to sign and properly reconcile Advantage's escrow accounts by comparing the total trust liability with the reconciled bank balance of the escrow accounts for the months of September and October, 1992. Marie Deering, Respondent, Deering's, wife and a corporate officer of Respondent, Advantage, signed the reconciliation form for the months of September and October, 1992. It appears from the record (Petitioner's Exhibit 1, Respondents' Licensure file) that Roger J. Kathman was the Broker of Record for Respondent, Advantage until August 21, 1992, when he resigned. Apparently, part of the problem stemmed from using a form developed by the previous real estate agency which was not the form suggested by the Petitioner for this purpose. Since being advised about the form and that comparing the total trust liability of each escrow account with the reconciled the bank balance of each escrow account and signing the reconciliation form was the responsibility of the broker of record, Deering has been properly fulfilling that responsibility and reporting on the correct form. The total trust liability of Advantage's security deposit escrow account should have been $5,700.00 rather than the $6,600.00 indicated by the audit because the $900.00 included in the audit figure from the San Juan lease should not have been included since this amount was not to be escrowed pursuant to the lease. This was a verbal agreement between the parties that was later executed as an addendum to the lease. Advantage's reconciled bank balance for the security deposit escrow account should also be $5,700.00, calculated as $6,020.00 reflected in the audit, minus $1,000.00 that was erroneously disbursed from the Rental distribution escrow account (also called the property management escrow account) instead of the security deposit escrow account , plus $680.00 that was erroneously deposited into the rental distribution escrow account instead of the security deposit escrow account ( $6,020.00 - $1,000.00 + $680.00 = $5,700.00). The total trust fund liability of the rental distribution escrow account should be $3,175.42, calculated as $3,174.82 as reflected in audit plus $0.60 to correct bookkeeping error ($3,174.82 + $0.60 = $3,175.42). The reconciled bank balance for the rental distribution escrow account should be $3,175.42, calculated as $2,805.42 reflected in the audit, plus $1,000.00 transferred from the security deposit escrow account as reflected in Finding of Fact 8, minus $680.00 transferred to the security deposit escrow account as reflected in Finding of Fact 8, plus a deposit of $50.00 to correct an error made in crediting a tenant account with $50.00 more than was deposited from tenant ($2,805.42 + $1,000.00 - $680.00 + $50.00 = $3,175.42). Although there were clerical or bookkeeping errors made in the handling of Advantage's escrow accounts, there was no evidence that Deering failed to immediately deposit funds received in trust in an escrow account, albeit not always the correct one. After the audit, Respondent, Deering promptly and properly corrected the escrow accounts and accounted for the funds resulting in balanced escrow accounts. While the Respondents were negligent in the handling of the escrow accounts, there is insufficient evidence to establish facts to show that Respondents were culpably negligent or that there was a breach of trust. The Respondents' license as real estate brokers in the state of Florida has never been disciplined.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Commission enter a Final Order finding Respondent Deering and Respondent Advantage guilty of technical violations of Section 475.25(1)(e) and (k), Florida Statutes. For such violations, Respondent Advantage should be given a written reprimand and Respondent Deering should be given a written reprimand and required to complete a 30-hour broker management course. Counts I and II of the Administrative Complaint should be dismissed. In making this recommendation, consideration has been given to the mitigating factors in relation to the disciplinary guidelines set out in Chapter 21V-24, Florida Administrative Code. Also, taken into consideration was the purpose of regulating any profession, the protection of the public by requiring compliance with those laws governing the profession. In this case, the recommended penalties will serve that purpose, the public has not been harmed, compliance has been accomplished and the penalty sufficient to remind the Respondents to be more diligent in the future. Adding any further penalty, including an administrative fine, would be unduly punitive. DONE AND ENTERED this 12th day of October, 1993, in Tallahassee, Florida. WILLIAM R. CAVE 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 October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-0606 The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Petitioner's Proposed Findings of Fact. 1. Unnecessary. 2.-12. Adopted in substance as modified by Findings of Fact 1 through 13. Respondent's Proposed Findings of Fact. Adopted in substance as modified in Findings of Fact 4, 5 and 8 through 13. Adopted in substance as modified in Findings of Fact 6 and 7. Adopted in Finding of Fact 15. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation, Division of Real Estate Hurston North Tower #308A 400 West Robinson Street Orlando, Florida 32801 Albert R. Deering, Pro se c/o Advantage Realty of Sarasota, Inc. t/a Century 21 Advantage 4121 Bee Ridge Road Sarasota, Florida 34233 Darlene F. Keller, Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, Esquire Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1900
