The Issue The issue is whether Respondents failed to file four quarterly and one annual financial statements and failed to maintain minimum amounts of net worth and working capital. If so, an additional issue is what penalty should be imposed.
Findings Of Fact At all material times, Respondent Susan Jan Haggerty (Haggerty) was the controlling person of Respondent Suncoast Resource Management, Inc. (Suncoast). The Board of Employee Leasing Companies (Board) licensed Suncoast as an employee leasing company, holding license number EL 0000055, and Haggerty as the company’s controlling person, holding license number CO 0000125. Haggerty is also the licensed controlling person for Suncoast Management Group, Inc., an employee leasing company licensed since January 1994. Respondents applied for their licenses in July 1992. Suncoast was first licensed on March 22, 1994, and Haggerty was first licensed on January 13, 1994. Haggerty’s license remains currently in effect. However, following its surrender, as described below, Suncoast’s license became null and void on September 12, 1995. During 1994--its first year of licensed operation-- Suncoast encountered financial problems. At some point prior to December 31, 1994, a workers’ compensation carrier won a judgment of about $200,000 against Suncoast for unpaid workers’ compensation premiums. During 1994, Haggerty decided to close Suncoast. She instructed the company’s independent accountant to contact Board staff and find out how to close down the company, from a regulatory standpoint. An unidentified male staffperson employed by the Board informed the accountant by telephone that all the Respondents had to do was to write the Board a letter informing it of what was happening and to submit the quarterly compiled financial statement. The accountant conveyed these instructions to Haggerty in October or November 1994. Suncoast ceased doing business effective December 31, 1994. During this month, Suncoast terminated its last employee. During 1994, Suncoast had a gross Florida payroll of less than $2.5 million. During 1995, an investigator for Petitioner contacted Haggerty and discussed some of the unfiled financial statements that are the subject of these cases. In an effort to resolve this matter, Suncoast formally surrendered its license on August 2, 1995. The Administrative Complaints allege that Respondents failed to file five financial statements with the Board. These are four quarterly financial statements due for the quarters ending December 31, 1994, and following, and the 1994 annual financial statement. There are also allegations of failure to maintain minimum requirements of net worth and working capital. It appears that Suncoast did not file any quarterly financial statements prior to the one due for December 1994. However, Petitioner did not elect to allege violations of the law for these failures to file. For the relevant period, Suncoast only filed two statements with the Board of Employee Leasing Companies. The first statement was a quarterly financial statement for the last quarter of 1994, which was filed in March 1996--well after the ordinary deadline for such quarterly statements. The second statement was an annual financial statement for 1994. The accountant prepared this statement, dated June 4, 1995, and Haggerty filed it with the Board of Employee Leasing Companies on July 10, 1996--also well after the ordinary deadline for such annual statements. The 1994 financial statement is compiled, not audited or reviewed. The 1994 financial statement reveals that Suncoast had a tangible accounting net worth deficiency of about $180,000 and a positive working capital of $28,737, which reflects current assets and current liabilities and treats the $200,000 judgment as a long-term liability. Suncoast never obtain Board-approved security to offset the $180,000 deficiency in its net worth.
Recommendation It is RECOMMENDED that the Board of Employee Leasing Companies enter a final order dismissing the administrative complaint against Suncoast Resource Management, Inc. and suspending Susan Jan Haggerty’s license for a period equal to the earlier of five years or until she proves to the reasonable satisfaction of the Board that the $200,000 judgment in favor of the workers’ compensation carrier has been satisfied or vacated with all judicial review concluded; but in no event shall the term of the suspension be less than one year. ENTERED in Tallahassee, Florida, on June 5, 1997. COPIES FURNISHED: Mary Ellen Clark Senior Attorney Department of Business and Professional Regulation 1940 North Monroe Street Suite 60 ROBERT E. MEALE 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 on June 5, 1997. Tallahassee, Florida 32399-0792 Attorney Frank M. Gafford Post Office Box 1789 Lake City, Florida 32506-1789 Isla Jones Executive Director Board of Employee Leasing Companies 1940 North Monroe Street Tallahassee, Florida 32399-0792 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue for determination is whether Respondent committed the offenses set forth in the Notice to Show Cause, filed on September 14, 2010, and, if so, what action should be taken.
Findings Of Fact The Department is the state agency charged with regulating condominiums, including condominium associations, pursuant to chapter 718, Florida Statutes. At all times material hereto, Whitehall was a condominium association operating in the State of Florida. At all times material hereto, Whitehall was responsible for managing and operating Whitehall Condominium in West Palm Beach, Florida. Pertinent to the case at hand, regarding a condominium's year-end financial statement, section 718.111, Florida Statutes, provides in pertinent part: (13) Financial reporting. --Within 90 days after the end of the fiscal year, or annually on a date provided in the bylaws, the association shall prepare and complete, or contract for the preparation and completion of, a financial report for the preceding fiscal year. Within 21 days after the final financial report is completed by the association or received from the third party, but not later than 120 days after the end of the fiscal year or other date as provided in the bylaws, the association shall mail to each unit owner at the address last furnished to the association by the unit owner, or hand deliver to each unit owner, a copy of the financial report or a notice that a copy of the financial report will be mailed or hand delivered to the unit owner, without charge, upon receipt of a written request from the unit owner. The division shall adopt rules setting forth uniform accounting principles and standards to be used by all associations and addressing the financial reporting requirements for multicondominium associations. The rules must include, but not be limited to, standards for presenting a summary of association reserves, including a good faith estimate disclosing the annual amount of reserve funds that would be necessary for the association to fully fund reserves for each reserve item based on the straight-line accounting method. This disclosure is not applicable to reserves funded via the pooling method. In adopting such rules, the division shall consider the number of members and annual revenues of an association. Financial reports shall be prepared as follows: (a) An association that meets the criteria of this paragraph shall prepare a complete set of financial statements in accordance with generally accepted accounting principles. The financial statements must be based upon the association's total annual revenues, as follows: * * * An association with total annual revenues of $ 400,000 or more shall prepare audited financial statements. (emphasis added). Whitehall's annual revenue is in excess of $400,000.00. Therefore, Whitehall is required to produce audited year-end financial statements. Whitehall's fiscal year coincided with the calendar year. As a result, Whitehall's 2009 year-end financial statement was due on or before May 1, 2010. On December 11, 2009, Whitehall engaged Hafer Company, LLC (Hafer), a Certified Public Accountant (CPA) firm, to produce its audited 2009 year-end financial statement. Whitehall must rely upon a third-party vendor, such as Hafer, to produce its audited financial statement. Hafer assigned Nicole Johnson as the auditor to produce Whitehall's audited 2009 annual financial statement.4/ Ms. Johnson's process involved, among other things, preparing a draft audit; providing a draft audit to the condominium board, which reviews the draft audit with Ms. Johnson; and then preparing the final audit. Whitehall's engaging Hafer in December 2009 did not contribute to any delay in producing Whitehall's audited financial statement. Ms. Johnson wanted to begin the auditing process early and made a request to Whitehall to begin on or about January 6, 2010, but Whitehall was not prepared to go forward at that time. She was not concerned with beginning at a later date because, among other things, her suggested date was an early date for beginning the auditing process. Whitehall's day-to-day bookkeeping and accounting was performed by a third-party vendor, The Accounting Department, Inc. (Accounting). On February 3, 2010, Ms. Johnson met with Accounting's representative who was handling the day-to-day bookkeeping and accounting. Having the meeting occur in February 2010 was not late or abnormal in the ordinary course of preparing an audited year-end financial statement for a condominium; and did not contribute to any delay in Ms. Johnson's producing Whitehall's audited 2009 year-end financial statement. On February 3, 2010, Ms. Johnson began her field-work and received the primary bulk of the accounting information necessary to complete the audit. From February 3, 2010, Ms. Johnson maintained communication, whether by telephone, email, or other methods of communicating, with Whitehall's directors and officers, and its property manager, Michael Weadock, who is a licensed Community Association Manager (CAM). Ms. Johnson's communications included requesting additional information, asking questions, and obtaining clarifications regarding items for the audited year-end financial statement. One of the items needed by Ms. Johnson to complete the audited year-end financial statement was independent verification from Whitehall's banks regarding Whitehall's certificates of deposit (CDs). Ms. Johnson, as the auditor, was responsible for obtaining the independent verification of the CDs from Whitehall's banks. Due to the economic crisis, which occurred in 2009, banks nationwide were taking an unusual amount of time to respond to auditors' requests associated with the independent verification of bank account information. The banks from which Ms. Johnson was requesting independent verification were no different. She did not receive independent verification of Whitehall's CDs until after the May 1, 2010, due date for Whitehall's audited 2009 financial statement. Whitehall could do nothing to expedite the banks' response to Ms. Johnson's requests. Additionally, on May 28, 2010, Ms. Johnson sent an email to Mr. Weadock requesting additional items that were outstanding. The requested items were non-bank items and were not items that would delay the completion of a draft audit, but were required for the final audit. The next business day, Whitehall provided the requested items. Whitehall had control over these non-bank items, which delayed completion of the final audit. Subsequently, Ms. Johnson received the independent verification of Whitehall's CDs from the banks. On June 23, 2010, Ms. Johnson completed Whitehall's audited 2009 Financial Statement and forwarded a copy to the Department. Even though the final audit was not completed until June 23, 2010, on or about June 10, 2010, Whitehall posted on its bulletin board a notice indicating that copies of the audited 2009 Financial Statement were available in its office. However, subsequently, another notice was posted on the bulletin board indicating, among other things, that copies of the audited 2009 Financial Statement would be available at the Board of Directors Meeting on July 1, 2010, in order to provide for the completion of the audited year-end financial statement. Whitehall does not dispute that neither notice complies with the manner/method of delivery requirement in section 718.111(13). Additionally, Whitehall provided notice to its unit owners as to the availability of the audited 2009 Financial Statement through its community television channel, website, and email blast. This same manner/method of sending the notices to unit owners was used in the past by Whitehall. Whitehall does not dispute that this manner/method of providing notice does not comply with the manner/method of delivery requirement in section 718.111(13). At the time of hearing, Whitehall had not provided its unit owners with a copy of the audited 2009 Financial Statement by mail or hand-delivery. Whitehall has prior disciplinary history regarding its failure timely to prepare and provide its audited year-end financial statements in prior years. On April 1, 2010, Whitehall and the Department entered a Consent Order resolving several statutory violations. One of the violations in the Consent Order was Whitehall's failure timely to prepare and provide its 2005, 2006, 2007, and 2008 audited year-end financial statements. As to this violation, the Consent Order concluded that Whitehall failed timely to prepare and provide the audited year-end financial statements for the four consecutive years. The Consent Order did not include a violation of the manner/method of delivery of notices regarding the year-end financial statements for the four consecutive years. Subsequent to the Consent Order, the Department received a complaint from a one of Whitehall's unit owners regarding Whitehall's failure timely to provide a copy of the 2009 audited year-end financial statement. The Department's usual practice is that, if a repeat violation occurs within a two-year period, administrative action is taken resulting in a consent order or notice to show cause. Considering the recent Consent Order, the Department followed its usual practice and appropriately pursued the complaint. On September 14, 2010, the Department filed a Notice to Show Cause against Whitehall, which is the subject matter of the instant case. Even though the unit owner's complaint did not include the manner/method in which notice was provided, the evidence fails to demonstrate that the Department was restricted to investigate only that which was complained of. The evidence fails to demonstrate that the Department's investigation of a violation of section 718.111(13) by Whitehall was improper. Further, the evidence fails to demonstrate that the Department's enforcement of the requirements of section 718.111(13) was selective enforcement against Whitehall. The evidence demonstrates that the Department participated in this proceeding primarily due to Whitehall having previously, within a short period of time, violated section 718.111(13) regarding Whitehall's failure timely to provide its unit owners a copy of audited year-end financial statements. Additionally, the evidence fails to demonstrate that either the Department or Whitehall needlessly increased the cost of litigation in the instant case.5/ Consequently, the evidence fails to demonstrate that the Department participated in this proceeding for an improper purpose as defined by section 120.595(1)(e)1.6/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares, and Mobile Homes, enter a final order: Finding that Whitehall Condominiums of the Villages of Palm Beach Lakes Association, Inc., violated section 718.111(13), Florida Statutes, by failing to deliver, in the manner authorized by statute, a copy of its audited 2009 year- end financial statement to all of its unit owners no later than 120 days after the end of the fiscal year, and by failing to make audited 2009 year-end financial statement available in the manner authorized by statute, when it became available; and Imposing a fine in the amount of $5,000.00. DONE AND ENTERED this 21st day of May, 2013, in Tallahassee, Leon County, Florida. S ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2013.
Findings Of Fact The Respondent holds a real estate license and is a registered real estate broker. (Petitioner, Exhibit 1 and 2) The Respondent was a thirteen (13) year employee of Mr. J. Clair Lanning, who in 1969 executed a property management agreement with Mr. A. W. Ross, to manage a 5-unit apartment building at 1033 19th Avenue South, St. Petersburg, Florida. (Testimony of Lanning, Respondent Exhibit 3). Upon Mr. Lanning's retirement in the mid-seventies, the Respondent continued to manage Mr. Ross' property by agreement of the parties. (Testimony of Lanning). The written agreement did not require that monthly statements be furnished to Mr. Ross, although Mr. Ross stated that the Respondent verbally agreed to such a procedure and a prior written agreement between Mr. Lanning, Mr. Ross and a previous owner required monthly statements. (Testimony of Ross, Respondent Exhibit 1). The Respondent furnished monthly statements to Mr. Ross until she became bedridden due to a serious accident. (Testimony of Ross, Thomas and Lanning). Following the Respondent's accident, the office files were moved from her office to her bedroom and the statements were generally not furnished on a monthly basis. (Respondent Exhibit 2). The apartments were in a low income area, and were subject to substantial variations in occupancy. The tenants could be described as "transients" and, accordingly, made payments on a weekly basis. (Testimony of Brown and Lanning). The Respondent was given a "free hand" in making repairs and maintaining the building. (Testimony of Ross). In return for managing the property, the Respondent was paid $50.00 per month. The Respondent has complied with the request for an accounting to the best of her abilities. (Testimony of Thomas, Ross and Lanning). Although a former tenant testified that she gave rent monies to a girl who she thought to be Respondent's daughter, and such monies were not accounted for by the Respondent, there is no reason to believe that the girl in question was the Respondent's daughter or that the Respondent ever received such payment. (Testimony of Brown). No testimony or documents were presented which support the allegation that the Respondent received any monies from March 1 through March 15, 1978, which were not accounted for. During the course of this investigation, a Board investigator requested and received access to the records in the possession of the Respondent relating to the subject property that she was required to keep pursuant to the written agreements. Certain of the records were unavailable to the investigator because they were destroyed in an office fire. (Testimony of Thomas).
The Issue Whether Respondent failed to secure workers' compensation coverage as required by law, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner Department is the State Agency responsible for enforcing those portions of Chapter 440, Florida Statutes, requiring that employers secure payment of workers' compensation benefits for their employees. On November 6, 2006, Petitioner's Investigator Michael Robinson, conducted a random visit at the construction site of a new residence at 2631 Bluewave Drive, in Middleburg, Florida. At that time, he observed Respondent Keith Myer, installing metal framing for drywall installation.2/ This is a construction industry function. No evidence of current corporate status of Custom Interiors & Design, Inc., was presented at hearing. No evidence of the number of employees employed by the corporation was presented, either. There was no evidence to show which, if any, corporate officer Mr. Myer might be. The impression given at hearing by Respondent Myer was that he was the corporation's sole employee. At the jobsite on November 6, 2006, Mr. Myer told Mr. Robinson that he had secured the payment of workers' compensation through Staff Masters, which is a staffing company.3/ Mr. Myer was unable to provide Mr. Robinson with any documentation that would support Respondent's claim of having secured the payment of workers' compensation through Staff Masters. Mr. Myer presented no such evidence at hearing, either. Investigator Robinson utilized the Agency's Coverage and Compliance Automated System (CCAS) database that contains all policy information from workers' compensation insurance carriers to insureds, and determined that Respondent did not have any State of Florida workers' compensation insurance policy in force and effect on November 6, 2006. Mr. Myer presented no such policy at hearing, either. At all times material, 2000 through 2004, Section 440.05, Florida Statutes, has allowed a sole proprietor, partner, or corporate officer actively engaged in construction to apply for an exemption from workers' compensation benefits. From 2005 through 2006, only corporate officers could elect "out". Only the named individual on the application was exempt from carrying workers' compensation insurance coverage. Respondent Myer d/b/a Custom Interiors & Design, Inc., has no current valid workers' compensation exemption, but he had an exemption that had expired in September 2002. At all times material, 2000 through 2006, Sections 440.05(3) and 440.05(6), Florida Statutes, have limited the duration of construction workers' compensation exemptions to a period of two years. At the end of two years, the exemption automatically expires or terminates. Respondent Myer testified that he was not aware that his exemption had lapsed, even though the law states that a construction exemption has a duration of two years. Although Respondent denied receiving an expiration notification letter from the Agency, Investigator Robinson testified, and documents were admitted in evidence which show, that on or about June 19, 2002, the Agency sent a letter to Respondent Myer at his last known business address as shown on his exemption card, notifying him that his exemption was due to expire. The documents in evidence also suggest that Respondent or a similar name filed an incomplete exemption application in October 2002, but no witness's testimony addressed this issue. While the Agency's investigator was exploring all possible coverage of Respondent, Respondent was added to the payroll of the general contractor, Maronda Homes, which was on- site at the Bluewave Drive address, so that Respondent became covered by Maronda Homes' workers' compensation insurance policy. As a result, the Agency did not issue a stop-work order against Respondent. There is no evidence that Respondent Myer or Custom Interiors & Design, Inc., were sub-contractors for, or employees of, any general contractor at any date prior to November 9, 2006, so as to be covered by that general contractor's workers' compensation policy pursuant to Section 440.10, Florida Statutes. On November 20, 2006, Investigator Robinson served Respondent with a "Request for Production of Business Records for Penalty Assessment Calculation," seeking copies of business records for a period of three years, pursuant to Section 440.107(7)(d)1., Florida Statutes. This was for the purpose of determining whether Respondent had secured workers' compensation coverage, whether he or his employees had current valid workers' compensation exemptions, and to determine any civil penalties that might be owed for failing to secure the payment of workers' compensation. At the time the records request was issued, Florida Administrative Code Rule 69L-6.015, stated, in relevant part: In order for the Division to determine that an employer is in compliance with the provisions of Chapter 440, F.W., every business entity conducting business within the state of Florida shall maintain for the immediately preceding three year period true and accurate records. Such business records shall include original documentation of the following, or copies, when originals are not in the possession of or under the control of the business entity: All workers' compensation insurance policies of the business entity, and all endorsements, notices of cancellation, nonrenewal, or reinstatement of such policies. * * * Records indicating for every pay period a description of work performed and amount of pay or description of other remuneration paid or owed to each person by the business entity, such as time sheets, time cards, attendance records, earnings records, payroll summaries, payroll journals, ledgers or registers, daily logs or schedules, time and materials listings. All contracts entered into with a professional employer organization (PEO) or employee leasing company, temporary labor company, payroll or business record keeping company. If such services are not pursuant to a written contract, written documentation including the name, business address, telephone number, and FEIN or social security number of all principals if an FEIN is not held, of each such PEO, temporary labor company, payroll or business record keeping company; and For every contract with a PEO: a payroll ledger for each day period during the contract period identifying each worker by name, address, home telephone number, and social security number or documentation showing that the worker was eligible for employment in the United States during the contract for his/her services, and a description of work performed during each pay period by each worker, and the amount paid each pay period to each worker. A business entity may maintain such records or contract for their maintenance by the PEO to which the records pertain. * * * All check ledgers and bank statements for checking, savings, credit union, or any other bank accounts established by the business entity or on its behalf; and All federal income tax forms prepared by or on behalf of the business and all State of Florida, Division of Unemployment Compensation UCT-6 forms and any other forms or reports prepared by the business or on its behalf for filing with the Florida Division of Unemployment Compensation. In response to the records request, Respondent provided only W-2 forms for 2003 through 2005, and duplicate checks for 2006. The W-2 forms show the "employer" as Customer Interiors & Design, Inc., and Keith Myer as an "employee." Each of the checks shows the payor as "Custom Interiors & Design, Inc., Keith Myer, Angela Myer," and shows the payee as "Keith Myer." According to the W-2 forms, Respondent Myer's personal gross income from Custom Interiors & Design, Inc., in calendar year 2003 was $13,250.00; in calendar year 2004 was $16,500.00, and in calendar year 2005 was $34,625.00. Using these W-2 forms and checks, the Agency investigator calculated a gross payroll from the period November 9, 2003 to December 31, 2004, as $17,604.17; for January 1, 2005 to December 31, 2005, as $34,625.00; and for January 1, 2006 to November 9, 2006, as $14,600.00. Based on Respondent's materials, Investigator Robinson calculated a penalty for the three-year time period of November 6, 2003, through November 6, 2006. In calculating the penalty, he assigned Class Code 5445, to the framing work performed by Respondent utilizing the SCOPES Manual; multiplied the class code's assigned approved manual rate with the payroll per one hundred dollars, and then multiplied all by 1.5. The approved manual rate for Class Code 5445 fluctuated from year to year, and Mr. Robinson's penalty worksheet reflected such fluctuations. After several tries, the Order of Penalty Assessment, which assessed a penalty of $18,937.37, was served on Respondent by certified mail on March 1, 2007. Respondent Myer did not dispute any of the formulas or mathematics employed. He did not challenge his "employee" status. He only asserted that the penalty is excessively high for an honest mistake.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation enter a final order approving the penalty of $18,937.37 against Respondent. DONE AND ENTERED this 28th day of September, 2007, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 28th day of September, 2007.
Findings Of Fact Little Havana Activities Center, Inc. was incorporated in 1973 as a non-profit corporation. It has occupied its present address of 819 S. W. 12th Avenue, Miami, Florida, since 1974. Annual corporate reports were filed through the year 1975 by Petitioner; however, the annual report for 1976 was not filed. Petitioner's activities are predominantly the providing of meals and services to citizens over 60. They are the only Spanish language oriented such agency in Dade County and they receive most of their funds from federal and State agencies with the United Way and private charities contributing less than fifty percent of their funds. Petitioner occupies eight sites in Dade County through which it services some 1200 people per day. These services include delivery of hot meals, the providing of transportation services, recreation facilities, and job opportunities. Up to 275 people are employed by Petitioner. Respondent maintains all corporate records on a computer. When the annual corporate report is received from a corporation, the new data contained thereon is inserted into the computer and can be readily retrieved. On or about 1 January of each year a first notice of annual report is computer typed and mailed to all corporations. The Division of Corporations does not keep a record of this mailout. On or about 1 September a second notice is computer printed and mailed to those corporations failing to meet the July 1 annual report deadline. Again no record is maintained of this mailout. Finally, on or about 1 December the computer researches the computer banks and all corporations which have not filed annual reports for that year are sent a Certificate of Dissolutionment, and the Department of State, Division of Corporations, is sent a computer printout of the companies, and their respective addresses, which the computer has dissolved. This computer printout is put on a microfiche card for future references.
The Issue Whether respondent is subject to disciplinary action pursuant to section 475.25, Florida Statutes, and , if so, whether the activities of respondent constitute grounds for disciplinary action.
Findings Of Fact Respondent was initially licensed as a real estate salesman on December of 1981, having been issued license number 0378791. The license was valid through September 30, 1983, and was not renewed. On Christmas day, 1983, respondent was at the home of Mr. and Mrs. Hinton Broxson for Christmas dinner. Respondent has been a friend of the Broxsons' daughter for years. During the course of the visit, the Broxsons told the respondent that they wanted to sell some property that they owned and asked respondent if he knew of anyone who might be interested in buying it. Respondent was familiar with the property since he had previously listed it in February of 1982 when he was working as a real estate salesman for Millard Realty. Shortly thereafter, respondent was contacted by Mrs. Bradley, a friend of respondent's mother, who asked him if he knew of any property that she and her aunt, Mrs. Prouty, could buy. Mrs. Bradley called respondent because she knew he had previously worked with real estate and mobile homes. Mrs. Bradley explained that she and her aunt wanted adjoining lots which could be used for mobile homes. One lot would be for Mrs. Prouty and the other lot would be for Mr. and Mrs. Bradley. Respondent realized that the property that the Broxsons wanted to sell fit the description of the property that Mrs. Bradley and Mrs. Prouty wanted to buy, and he offered to show the property to Mrs. Bradley. Respondent took the Bradleys and Mrs. Prouty out to see the property because they could not have found the property without his help. The Bradleys and Mrs. Prouty decided to buy the property, and respondent told them that he would talk to the Broxsons and find out what arrangements could be worked out. Respondent had several conversations with the Broxsons and with the Bradleys to work out the details of the purchase. Respondent talked to Mrs. Prouty who stated that she would not buy the property unless her lot had its own well on it. Respondent relayed this information to the Broxsons; and Mr. Broxson agreed to put a well on the property. Water had previously been supplied to Mrs. Prouty's lot from a well on the lot purchased by the Bradleys. On January 9, 1984, respondent prepared, at the direction of the parties, two sales contracts. One between the Broxsons and Mrs. Prouty for the property located at 12108 Glenhill Drive and one between the Broxsons and the Bradleys for the property at 12106 Glenhill Drive. The contracts were standard form contracts. The Broxsons accepted the offers and signed the contracts on January 9, 1984. In both sales contracts the clause referring to the procuring real estate broker had been marked out and initialed by the parties. Respondent received from Ellen Prouty a cashier's check in the amount of $1,000.00 as an earnest money deposit and received from Donald and Jeanette Bradley a cashier's check in the amount of $2,000.00 as an earnest money deposit. The $2,000 check was purchased by Mrs. Prouty and made out to Don and Jan Bradley. They endorsed the check and gave it to respondent. At the bottom of both contracts respondent signed the deposit receipt as the representative of the seller. The deposit receipt read, "Receipt of the above stated deposit is hereby acknowledged . . . to be held in trust per terms and conditions above set forth." Paragraph 9 of the contract provided that "the cash proceeds of sale shall be held in escrow by Seller's attorney or by such other escrow agent as may be mutually agreed upon for a period of not longer than 5 days from and after closing date." Although the parties did not specifically agree that respondent would be the escrow agent for the deposit money, the purchasers entrusted him with their deposits and assumed that he would be accountable for the money. Mrs. Prouty explained her understanding as follows: "I assumed that real estate people took a deposit. That's the way they done when I sold my house. They took a -- people paid a deposit. But the real estate man kept it until the deal was finished. So I assumed this would be the same way." By accepting the deposits from the purchasers and signing the deposit receipts acknowledging that the deposits received were to be held in trust, respondent accepted the responsibility of complying with the terms set forth in the contract. Respondent delivered the two cashiers checks to the Broxsons. The Broxsons retained the cashier's check in the amount of $2,000.00 and deposited the same in their personal account. The Broxsons endorsed and returned the cashier's check in the amount of $1,000.00 to respondent as part of an agreed commission of $1,500.00. Respondent considered that the money was a gift from the Broxsons because there was no written agreement that required a commission to be paid. The Bradley's were not aware that respondent would get a commission for the sale. Respondent suggested that the Bradleys and Mrs. Prouty use a title company, and they decided to do so. Respondent delivered the sales contracts to the title company, but he did not deliver the deposits to the title company, as he had given the deposits to Mr. Broxson. Respondent did not attend either closing, although he had intended to do so. There was some difficulty on the paperwork at the closing on the Bradley property, and Mr. Bradley and the Broxsons were upset about the changes and the fact that respondent was not there to facilitate the closing. The transaction between the Bradleys and the Broxsons closed on February 2, 1984, and the transaction between the Broxsons and Mrs. Prouty closed on February 15, 1984. Respondent became involved with these real estate transactions only because he was trying to help two groups of friends who had asked for his assistance. There was no evidence presented to suggest that respondent participated in these transactions with any dishonest intent, and there was no evidence that respondent misrepresented any material fact.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Counts II, V, and VII of the Administrative Complaint be dismissed; that respondent be found to have committed those acts charged in Counts I, III, IV, and VI, and that an administrative fine of $1,500 be imposed, to be determined as follows: Count I - $600 Count III - $150 Count IV - $600 Count VI - $150 DONE and ENTERED this 13th day of February, 1986, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 1986. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 84-4200 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties to this case. Rulings On Proposed Findings of Fact Submitted by the Petitioner: 1. Accepted as clarified in Finding of Fact 1. 2. Accepted in Finding of Fact 3. 3. Accepted in Finding of Fact 5. 4. Accepted in Finding of Fact 7. 5. Accepted in Finding of Fact 3. 6. Accepted in Finding of Fact 5. 7. Accepted in Finding of Fact 7. 8. Accepted in substance in Finding of Fact 5. 9-11. Accepted in Finding of Fact 9. 12. Accepted in substance in Finding of Fact 9. 13.-15. Petitioner's paragraphs 13, 14, and 15 consist of a summary of the testimony regarding the requirement of the well dug on Mrs. Prouty's property. The conflicting testimony is resolved in Finding of Fact 4. 16. Accepted in substance in Finding of Fact 4. Rulings of Proposed Findings of Fact Submitted by Respondent: Accepted in Finding of Fact 1. Accepted in Finding of Fact 2. Accepted in substance in Finding of Fact 3. Accepted in Finding of Fact 3. Accepted in Findings of Fact 4 and 5. Accepted in substance in Finding of Fact 5. Accepted in Finding of Fact 7. Accepted in Finding of Fact 9. Accepted to the degree it is not a summation of testimony in Finding of Fact 9. Accepted in Finding of Fact 9. 11.-13. These paragraphs consist of a summary of the testimony regarding the well on Mrs. Prouty's property. The conflicting testimony is resolved in Finding of Fact 4. Accepted in Finding of Fact 11. Accepted in Finding of Fact 6. COPIES FURNISHED: Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 William E. Ferguson, III Post Office Box 454 Brandon, Florida 34299 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301
The Issue Whether the Respondent is guilty of misrepresentation, false promises, false pretenses, dishonest dealing, trick, scheme or device in a real estate transaction in violation of Section 475.25, Florida Statutes. Whether the license of Respondent should be revoked or suspended or whether the Respondent should be otherwise disciplined.
Findings Of Fact Respondent is a registered real estate salesperson who holds license no. 0066091. She was employed as a "listing solicitor" by World Wide Property Services, Inc., a registered real estate broker (now dissolved) from June 30, 1975 to April 2, 1976, soliciting listings for real estate in Florida. The solicitation was by telephone nationwide except Florida. Seymour L. Rottman was President of World Wide Property Services, Inc. and Lee Small was Vice President of the corporation during the time Respondent was employed. The purpose of World Wide Property Services, Inc. was to secure listings of and purchasers for various Florida properties. Mr. Rottman was a subpoenaed witness for Petitioner at subject hearing. During Respondent's period of employment he and Mr. Small were in charge of hiring salesmen for the company and hired Respondent. Respondent was employed to obtain listings by telephone from property owners who lived out of state but owned Florida property. The procedure followed was for a salesman to call an out of state land owner picked from a list of prospects and inquire if he or she would be interested in selling their property at a higher price than it had been purchased for. This was termed a "front" call and the salesman was termed as a "fronter." If the prospect expressed interest in listing the property, his or her name was provided to World Wide Property Services, Inc. who then mailed literature to the property owner describing the efforts that would be made by that organization to sell the property. Enclosed with this material was a listing and brokerage agreement. This agreement provided that the owner of the property would pay a prescribed listing fee to World Wide Property Services, Inc. which would be credited against a ten (10) percent commission due that firm upon sale of the property. In return, the corporation agreed to include the property in its "listing directory" for a one year period, direct its efforts to bring about a sale of the property, advertise the property as deemed advisable in magazines or other mediums of merit, and to make an "earnest effort" to sell the property. The accompanying literature explained that the listing fee was necessary in order to defray administrative costs of estimating the value of the property, merchandising, advertising, brochuring and cataloging the information. The material also stated that advertising would be placed in various foreign countries and cities of the United States. In addition, it stated that the property would be "analyzed," comparing it to adjacent property to arrive at a price based on recent sales of neighboring property and also review the status of development and zoning in the immediate area of the property to assist in recommending a correct selling price for approval by the owner. During the course of the calls to prospects Respondent advised them that the property would be advertised internationally and in the United States and that bona fide efforts would be made to sell the property. After the promotional literature was sent to the prospect, the salesmen including Respondent, made what was called a "drive" call to answer any questions and to urge that the property be listed. After making these calls Respondent had no further contact with the property owner. The listing fee was $325. The salesmen received approximately one-third of the fee, about $100 per listing. The salespersons, including Respondent, telephoned the prospects and then read from the script entitled "front" and "drive." The instructions from the broker was to stay within the script and she stated that Mr. Rottman or Mr. Small was in the office at all times they worked. During the course of operation of less than a year World Wide Property Services, Inc. secured about 200 listings and grossed approximately $80,000 to $90,000 in the "advance fee" listings, but no sales were made. Respondent made no sales but did secure a limited number of listings. Respondent testified that she read from the script heretofore referred to as "front" and "drive" and did not vary from it. She worked in a "listing office" which was one of the two offices of the employer. She was aware of articles stating foreign investors were interested in buying Florida property. Respondent did not attempt to make sales inasmuch as it was not the job for which she was employed. She had no knowledge or information that the advance fee operation of which she was a part was an illegal operation or an unethical operation. Respondent had no supervisory capacity in the corporation. She testified that she quit her employment with World Wide Property Services, Inc. as soon as she read it was under investigation but did not notify the Petitioner that she was no longer active. Petitioner contends: that while a salesman for World Wide Property Services, Inc. Respondent solicited and obtained listings by telephone of property owners and that as an inducement to list the property, falsely represented that the property could be sold for a price far in excess of its purchase price; that a bona fide effort would be made to sell the property and that it would be listed nationally and internationally and that the company had foreign investors wanting to purchase United States property. Respondent contends: that she did not know the "advance fee" operation was fraudulent; that World Wide Property Services, Inc. was a registered broker; that at the time she read that the actions of her employer were being investigated she discontinued her employment; that she never misrepresented or fraudulently induced any potential customer to send money to her employer.
Recommendation Reprimand the Respondent is writing. DONE AND ENTERED this 21st day of June, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Salvatore A. Carpino, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Stanley M. Brody, Esquire 407 Lincoln Road Building Miami Beach, Florida 33139 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION FLORIDA REAL ESTATE COMMISSION, Petitioner, PROGRESS DOCKET NO. 3102 DADE COUNTY vs. DOAH CASE NO. 77-1574 ELIZABETH P. OTTO POPPEN, Respondent. /
