The Issue The issues in this case are whether Respondent violated Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), Florida Statutes (1997), by operating as a broker without holding a valid broker's license, operating as a broker while licensed as a salesperson, collecting money except in the name of his employer, and committing misrepresentation, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust; and, if so, what, if any, penalty should be imposed. (All Chapter and Section references are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Respondent is licensed in the state as a salesperson pursuant to license number 0575377. The last license issued was issued as an involuntary inactive salesperson at 361 Godfrey Road Southeast, Palm Bay, Florida 32909. After March 31, 1995, Respondent's license as a salesperson became inactive after Respondent did not renew it. Between March 1994 and January 1997, Respondent was employed as a salesperson by Prestige Homes of Brevard, Inc. ("Prestige"). Prestige is a Florida corporation wholly owned by Mr. Mark Pagliarulo and Mr. John Wales. Prestige is engaged in the business of residential construction. Mr. G. Wayne Carter was the sponsoring broker for Respondent from March 1994 through January 1997. Mr. Carter was licensed in the state as a broker until his license was revoked in 1998. Between March 1994 and January 1997, Prestige paid Respondent a sales commission of three percent of the sales price of each home constructed by Prestige and sold by Respondent. Prestige paid Respondent a weekly draw against commissions earned by Respondent. Mr. Carter, the sponsoring broker for Respondent, had no knowledge of the payments received by Respondent. Respondent did not deposit any sales commissions to Mr. Carter's escrow account. Respondent participated in various activities that violate relevant provisions in Sections 475.25 and 475.42. Respondent collected $1,100 from Marcia Pitts for a sprinkler system, a $1,000 initializing fee from Linda and David Grogan, and a $1,000 "design fee" from Mrs. Robert Leudesdorf. Respondent converted the foregoing sums to his personal use without the knowledge of his employers at Prestige and without the knowledge of Respondent's broker. Respondent operated as a broker without a valid broker's license, while licensed as a salesperson, and collected money for himself rather than for his broker or his employer. Respondent routinely designed variations on a "custom" home design without his employers' knowledge. Respondent then charged the purchasers approximately $1,000 for the plan changes. Respondent routinely deducted the $1,000 fee from the contract price Prestige charged the customer and converted the $1,000 fee directly to his personal use. Respondent failed to disclose to the purchasers that he was not acting on behalf of Prestige. The purchasers believed they were dealing with Prestige. The omission and failure to disclose amounted to a misrepresentation, false pretense, and breach of trust in a real estate transaction. For a time, Respondent's employers at Prestige condoned Respondent's "free lance" activities. Respondent's employers reduced Respondent's draws against commissions by the amount of the "free lance" fees converted by Respondent. After Respondent failed to discontinue his "free lance" activities, however, Prestige terminated Respondent's employment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding Respondent guilty of violating Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), and revoking Respondent's license. DONE AND ENTERED this 31st day of March, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 31st day of March, 1999. COPIES FURNISHED: Steven Johnson, Esquire Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Steven Michael Wallace 361 Godfrey Road Palm Bay, Florida 32909 James Kimbler, Acting Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 William Woodyard, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue in this case concerns whether the Petitioner should issue a cease and desist order and/or impose sanctions against the Respondent on the basis of allegations that the Respondent, by failing to have its books, accounts, and documents available for examination and by refusing to permit an inspection of its books and records in an investigation and examination, has violated Sections 520.995(1)(a), (f), and (g), Florida Statutes.
Findings Of Fact Sometime during the month of February of 1991, Ms. Jennifer Chirolis, a Financial Investigator from the Department of Banking and Finance, visited the offices of the Barat Company. She spoke with Mr. Roque Barat and determined that the Barat Company was conducting retail installment sales without being licensed to do so under Chapter 520, Florida Statutes. Mr. Chirolis advised Mr. Roque Barat that he needed a license and asked him to cease operations until he obtained the necessary license. The Barat Company thereafter obtained the necessary license and was still licensed as of the time of the formal hearing. Thereafter, the Department received a complaint about the Barat Company from a customer. The customer's complaint was to the effect that the Barat Company had made misrepresentations concerning the fee paid by the customer. The Department initiated an "investigation" of the customer's complaint and also decided to conduct an "examination" of the Barat Company. On April 22, 1992, a Department Examiner, Mr. Lee Winters, went to the office of the Barat Company to conduct the "examination" and "investigation". The Barat Company is operated out of a small office with two employees and a few filing cabinets. When Mr. Winters arrived, employees of the Barat Company were conducting business with two customers. Mr. Winters identified himself to the employees and informed them that he had been assigned to conduct an "examination" and "investigation" of the Barat Company. A Barat Company employee, Mr. Fred Vivar, said that he could not produce the company's records without express authorization from Mr. Roque Barat, that Mr. Roque Barat was out of the country, that he could not get in touch with Mr. Roque Barat at that moment, but that when he did get in touch with him, he would advise Mr. Roque Barat of Mr. Winter's desire to examine the company's books and records. Following a number of telephone calls over a period of several days, on May 1, 1992, Mr. Vivar advised Mr. Winters that he had received authorization from Mr. Roque Barat for the Department to inspect the books and records of the Barat Company. An appointment was made for the Department to inspect the books and records on May 6, 1992, beginning at 10:00 a.m. On May 5, 1992, a letter from an attorney representing the Barat Company was hand delivered to Mr. Winters. The letter included the following paragraph: It is my understanding that you have requested the opportunity to view the records of the above-referenced company, said inspection to take place on May 6, 1992. Please be advised that if this "inspection" is purportedly being done by your agency's authority, pursuant to F.S. 520.996, that no records will be produced absent compliance by your department with F.S. 520.994 including, but not limited to, the Barat Company exercising its right to challenge said subpoena. The Department concluded from the letter of May 5, 1992, that the Barat Company not only refused to produce records without a subpoena, but that, even if served with a subpoena, the Barat Company would resist compliance with the subpoena unless and until ordered to comply by a court. For that reason the Department did not pursue the issuance of a subpoena. Mr. Winters has been involved in over one hundred "examinations" under Chapter 520, Florida Statutes. In the course of those "examinations" there have been only two licensees that did not produce their records. Those two licensees were the Barat Company and another company known as Phase One Credit. Mr. Roque Barat is an officer and director of both Phase One Credit and the Barat Company. The license of Phase One Credit was revoked for its failure to produce its books and records. The refusal to produce the books and records of the Barat Company was occasioned by an effort on the part of Mr. Roque Barat to avoid payment of "examination" fees authorized by Section 520.996, Florida Statutes. In the summer of 1992, the Barat Company filed for bankruptcy, closed down its business operations, and is currently winding up the business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance issue a Final Order in this case to the following effect: Dismissing the charge that the Barat Company has violated Section 520.995(1)(a), Florida Statutes; Concluding that the Barat Company has violated Sections 520.995(1)(f) and (g), Florida Statutes, as charged in the Administrative Complaint; Imposing a penalty consisting of: (a) an administra-tive fine in the amount of one thousand dollars, and (b) revocation of the Barat Company's license; and Ordering the Barat Company to cease and desist from any further violations of Chapter 520, Florida Statutes. DONE AND ENTERED this 23rd day of February, 1993, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 23rd day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5620 The following are my specific rulings on the proposed findings of fact submitted by the parties. Proposed findings submitted by Petitioner: Paragraph 1: Rejected as constituting a conclusion of law, rather than a proposed finding of fact. Paragraphs 2, 3 and 4: Accepted in substance. Paragraph 5: Accepted in substance, with the exception of the last five words. The last five words are rejected as irrelevant to the issues in this case and as, in any event, not supported by clear and convincing evidence. Paragraph 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 8: First sentence accepted. Second sentence rejected as inaccurate description of letter. (The relevant text of the letter is included in the findings of fact.) Last sentence rejected as subordinate and unnecessary evidentiary details. Paragraph 9: Rejected as irrelevant to the issues in this case. Paragraph 10: First two sentences rejected as irrelevant to the issues in this case. Last two sentences accepted in substance. Paragraph 11: Accepted in substance. Paragraph 12: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 13: Accepted. Proposed findings submitted by Respondent: As noted in the Preliminary Statement portion of this Recommended Order, the Respondent's proposed recommended order was filed late. The Respondent's proposed recommended order also fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, in that it fails to contain citations to the portions of the record that support its proposed findings of fact. A party's statutory right to a specific ruling on each proposed finding submitted by the party is limited to those circumstances when the proposed findings are submitted within the established deadlines and in conformity with applicable rules. See Section 120.59(2), Florida Statutes, and Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), in which the court held, inter alia, that a party is not entitled to more than a reasonable period of time within which to submit its proposals. Because the Respondent submitted its proposals late and because those proposals fail to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, the Respondent is not statutorily entitled to a specific ruling on each of its proposed findings and no such specific findings have been made. (As noted in the Preliminary Statement, the Respondent's proposed recommended order has been read and considered.) COPIES FURNISHED: Ron Brenner, Esquire Office of the Comptroller 401 Northwest 2nd Avenue Suite 708-N Miami, Florida 33128 Louis J. Terminello, Esquire 950 South Miami Avenue Miami, Florida 33130 Michael H. Tarkoff, Esquire 2601 South Bayshore Drive Suite 1400 Coconut Grove, Florida 33133 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Copies furnished continued: William G. Reeves, General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32399-0350
Findings Of Fact The Petitioner, Lawrence A. Grolemund, has been in the securities business for over 21 years. Except for two complaints--one in 1986 and a second 1988--he has not been the subject of complaint or investigation by the National Association of Securties Dealers (NASD) or any state. He earned a reputation as a successful securities dealer and, as his career progressed, as manager of securities dealership branch offices. As branch manager, one of Grolemund's primary responsibilities was to insure that his office functioned in compliance with applicable state and federal law, and the rules of the NASD. Due to the reputation Grolemund had earned, the Chairman of the Board of Prudential Bache Securities, Inc., personally recruited Grolemund as a branch manager. After a training period, Grolemund assumed duties at the company's New Orleans office in August, 1982. He did not become a registered options principal for the New Orleans office until December, 1982. For several years before Grolemund's arrival, the company's New Orleans office had been a "problem office." A disproportionate share of securities violations occurred in that office, and management had difficulty controlling the associated persons in the office to achieve compliance. Several branch managers who preceded Grolemund had been disciplined by the NASD for inadequate supervision of the office. Grolemund knew some of the problems--he was hired to try to correct them--but he did not know the extent of the problems he would face when he took over. On August 25, 1986, the District 5 Business Conduct Committee filed a complaint against Howard Hampton, E.F Hutton & Company, Inc., Prudential-Bache Securities, Inc., Grolemund and others. The gist of the complaint is that Hampton committed various violations of the Securities and Exchange Act, SEC rules and NASD rules while an associated person with E.F. Hutton and with Prudential-Bache. Hampton was with E.F. Hutton from February, 1981, through August, 1982, and was with Prudential-Bache in the New Orleans office from August, 1982, through February, 1984. The violations involve Hampton's dealings with clients he brought with him from E.F. Hutton to Prudential-Bache. Most of the violations involve the exercise of discretionary power in the accounts of clients without prior written authorization. Some of the alleged incidents occurred while Hampton was at E.F. Hutton. Some occurred while Hampton was at Prudential-Bache but before Grolemund arrived at the New Orleans office. Some occurred after Grolemund arrived but before he became an options principal for the office. In some cases, the information in the file on which Grolemund had to rely was incorrect. Grolemund fired Hampton in December, 1983. (At the time Hampton was fired, no complaints had yet been leveled against Hampton. In fact, all of the clients who ultimately complained against Hampton went with Hampton when he was fired from Prudential-Bache.) Grolemund also fired some other "unsavory" account executives in the New Orleans office. Grolemund was charged, along with other Prudential-Bache options principals, with failure and neglect to establish, maintain, and/or enforce written procedures which would enable Prudential-Bache to exercise reasonable and proper supervision of Hampton and with failure and neglect to supervise Hampton reasonably and properly. Grolemund was represented in the proceedings before the district committee by in-house counsel for Prudential-Bache. Otherwise, Grolemund did not have independent advice of counsel. Prudential-Bache was involved in other proceedings before the SEC which made it in its best interest to resolve the matters arising out of the New Orleans office. For several months, Prudential- Bache tried to convince Grolemund to settle. In addition, Grolemund was concerned whether the District 5 Business Conduct Committee would fairly consider the complaint against him. As part of his successful management of Prudential-Bache's New Orleans office, he competed directly against other securities dealers in the area, some of which were represented on, or had friends who were on, the Committee. When Grolemund came to New Orleans, there were 16 account executives in the office. Under his term of management, after he fired four to five account executives, including Hampton, the New Orleans office grew from 16 to 36 account executives. In addition, Grolemund opened satellite offices in Shreveport and Lafayette, Louisiana. These offices grew in size to 11 and 9 account executives, respectively. Many of the account executives Grolemund added were recruited away from competitors, and he was concerned that there might be hard feelings against him among the members on the Committee. After spending considerable time weighing all factors, Grolemund agreed on or about November 3, 1987, to settle the Hampton matter on terms that included acceptance of a finding that he was guilty of the allegations against him and acceptance of a censure, a 21-day suspension, a requirement that he re- qualify as a registered options principal, and a $7,500 fine. The settlement was reduced to writing in final form on April 25, 1988. As a result of the 21-day suspension, another options principal at Prudential-Bache was required to sign all options agreements during the suspension. Otherwise, Grolemund's job was the same as before the suspension, and Grolemund continued to receive his full normal compensation from Prudential- Bache. Prudential-Bache paid the fine for Grolemund. Re-qualification was a matter of passing a written examination, which did not present a problem for Grolemund. In agreeing to settle, Grolemund misunderstood that the district committee's action would not be the basis of any other proceedings against him. He also misunderstood that the offer of settlement would resolve all pending matters involving the New Orleans office, including the so-called Keel matters. Contrary to Grolemund's understanding, the NASD filed another complaint against Prudential-Bache and Grolemund on May 9, 1988. This complaint, which had been under investigation during the time the Hampton case was proceeding, involved an account executive named Patrick Keel. Like Hampton, Keel was alleged to have exercised discretionary power in the accounts of clients without prior written authorization. He also was alleged to have recommended unsuitable stock and option investments to two clients and to have falsely reported to Prudential-Bache that some of his clients enjoyed profits from the investments he had recommended and made for them, when in fact they had incurred losses. As with the Hampton matter, Grolemund was accused of having failed to establish, maintain, and enforce written supervisory procedures that would have enabled him to exercise proper supervision of Keel and of having failed to properly supervise Keel. The Keel matter went to hearing before the District 5 Business Conduct Committee on August 24-25, 1989. As to what it called Cause One, the Committee found that Keel engaged in unauthorized and unsuitable options transactions in the account of one customer and that Grolemund had failed to supervise Keel properly in connection with the options transactions. Under Cause Two, the Committee found that Keel made unauthorized and unsuitable stock and options transactions in the account of another customer and that Grolemund had ample early warning that Keel was not handling his options accounts properly. The Committee noted that in October, 1984, the customer had lodged complaints regarding Keel's options trading and that Grolemund had daily conversations with a superior concerning problems with Keel's options accounts. The Committee found that, even if Grolemund did not have the benefit of the early warnings of irregularity, his response to the concerns raised by the customer in her December 10, 1984, telephone conversation was inadequate. The Committee found that, given the customer's refusal to sign the activity letter that Grolemund sent her, it was incumbent upon Grolemund to determine whether the customer understood options, whether options transactions were consistent with her financial situation, and whether she had approved the options transactions before their execution. The Committee found that Grolemund did not compile and review the customer's account documentation, which would have revealed that options trading was inconsistent with her objectives and needs and that the customer was only approved for Level II trading although Keel had executed two Level III transactions. Accordingly, the Committee found that Grolemund had violated Article III, Sections 1 and 27 of the Rules of Fair Practice by failing to supervise Keel properly. Under Cause Three, the Committee found that Keel recommended to a customer (the same customer involved in Cause Two) that she commit 25-30% of her net worth to a Hawaiian real estate private placement tax shelter that was not consistent with the customer's needs and objectives. However, the Committee noted that there was conflicting evidence as to whether Grolemund had reviewed the recommendation in light of the customer's personal financial strategy form. Although it was not Grolemund's job at Prudential-Bache to review suitability determinations with respect to private placements, the Committee expressed the view that Grolemund was in the best position to supervise the recommendations of salesmen and that he could not delegate this responsibility to other departments. Accordingly, the Committee found that Grolemund had violated Article III, Sections 1 and 27 of the Rules of Fair Practice under Cause Three. As to Causes Four through Eleven, the Committee dismissed all but two for insufficient evidence. As for the two that were not dismissed, the Committee found that Keel exercised discretion in the accounts of customers without prior written approval and that Grolemund failed to exercise proper supervision over Keel. The Committee reasoned that, by the time at issue, Grolemund had adequate warning of Keel's exercise of discretion without authority and that Grolemund allowed Keel not only to continue options trading but also allowed Keel to continue using special telephone and "bunching" privileges that, in the Committee's view, "greatly facilitated Keel's exercise of discretion." The Committee dismissed Cause Twelve to the extent that it alleged that Grolemund failed to supervise Keel reasonably with respect to the submittal of inaccurate active account information reports by him. The Committee, in its June 21, 1990, decision, censured Grolemund, barred him from associating with any NASD member in any principal capacity and fined him $4,000. Under the bar, Grolemund would not have been permitted to apply for reinstatement for at least ten years. Based on this decision, and the earlier disposition of the 1986 complaint in the Hampton matter, the Department offered to conditionally grant Grolemund's application, prohibiting Grolemund from acting as a principal, supervisor or manager. When Grolemund refused to accept the conditions, the Department denied the application. Grolemund appealed the Committee decision in the Keel matter to the Board of Governors of the NASD. The appeal was heard on October 11-12, 1990. On appeal, the Board reversed the finding that Keel executed out-of-level options transactions. The Board also noted that the record demonstrates a high degree of direct interaction between Grolemund, Keel, Keel's clients, and Prudential-Bache's operations manager and that the firm's records distribution system may have prevented Grolemund from exercising greater supervision over Keel. Because branch managers did not receive copies of customer information relating to limited partnerships, such as the Maui/Waikiki deal, Grolemund had no opportunity to assess the suitability of Keel's customer for the offering, or to compare the documents that Keel had completed in connection with that deal with other account information regarding the customer. The Board also noted that Grolemund engaged in more-than-adequate follow-up with clients following the receipt of complaints and that the customer may have been less than candid regarding her lack of understanding of the investments that Keel recommended for her account. Nonetheless, the Board believed that Grolemund fell short of the standard of reasonable supervision in that it should have been clear to Grolemund that Keel had not been properly trained and lacked a basic understanding of the practices of the securities industry. The well-documented problems that Keel's options trading caused with respect to customers' margins, and Keel's documented confusion of cash and margin accounts, certainly should have put Grolemund on notice that Keel lacked sufficient training to engage in such risky trading strategies as writing options. The Board also thought Grolemund should have inquired why there was no options agreement on file for one customer until after options trading in her account had ceased. The Board concurred with the Committee that Grolemund fell below the standard of reasonable supervision, and thereby violated Article III, Section 1 and 27 of the Rules of Fair Practice. The Board of Governors affirmed the censure and $4,000 fine against Grolemund. However, in light of the various mitigating factors regarding Grolemund's overall conduct, the Board ruled that barring him as a principal was an excessively harsh penalty. Instead, the Board suspended him from acting in any principal capacity for seven days and required him to requalify by examination in all principal capacities. In July, 1985, long before either the Hampton or the Keel complaint was filed, Prudential-Bache promoted Grolemund to the new Tampa office. When Grolemund took over as branch manager, the Tampa office was only nine months old. Grolemund successfully managed the Tampa office until May, 1990, when he applied for registration as an associated person with Advest, Inc. During Grolemund's time as branch manager, the Tampa office grew to 35 account executives. The evidence proved that no violations occurred in the Tampa office during the almost five years that Grolemund was the branch manager there. Since the Hampton and Keel matters, the securities industry has changed remarkably, in part as a result of the October, 1987, stock market crash. Before the crash, options trading generally was viewed as a conservative investment--a way to participate in the market with limited resources and to provide an additional source of income from a conservative investment. The risks of options trading now are widely recognized, and management generally has become sensitive and responsive to those risks. In addition, the data processing and informations systems now in general use in the industry have given management new and effective tools for supervising the activities of account executives. Some of these systems make it impossible for some of the Hampton and Keel violations to occur today. For example, the systems will not process options trades for which there is no record of prior written authorization in the file. For these reasons, it is not likely that activities such as those in which Hampton and Keel were involved in 1981 through 1984 would go undetected today by a manager of Grolemund's caliber or that, detected, they would go unchecked. Advest, Inc., the securities dealer that wants to associate Grolemund to manage its new Clearwater office, is a respectable securities dealer that places reasonably strong emphasis on compliance with the requirements of the various regulatory agencies under which it must operate. It specializes in relatively safe investments, certainly as compared with the activities of the New Orleans office of Prudential-Bache in the early 1980s. Options trading represents only 14 to 15 percent of Advest's total business nationwide. Less than six percent of the business of its new Clearwater office consists of options trading. Advest's compliance department generates a monthly computer report called a "commission versus equity" run which displays the account name and number, the account executive's number, gross commission generated for the month and year, the number of trades for the month and year to date, the amount of cash and securities in the account, and the value of the account in relationship to the trading on a percentage basis. Some variation of the report is provided to the branch managers, to the division managers, and to the branch group manager, with each higher level of management getting more and more information in the report. An options activity report is produced in the Advest compliance department on a daily basis listing all accounts that traded outside their levels, if any, and any accounts that have a trade executed where the appropriate forms are not on file within the allowed period. Advest compliance sends out active account letters to verify customer satisfaction. If the customer does not respond within ten days, a second letter is sent. If the customer does not respond to the second letter within ten days, the account is restricted from further activity. The Advest compliance department reviews all aspects of the branch offices on an annual audit. Compliance then issues a report to the branch manager, the division manager, and the branch group manager. The computer generated commission report would automatically detect a trade executed by a registered representative not assigned to the account for which the trade is completed and would place an asterisk around the account executive number. The manager would then be contacted by the compliance department and asked to explain the discrepancy. In addition to the ordinary compliance procedures in place at Advest, to address the concerns of the Department and other regulatory agencies, Advest proposes several measures to reduce even further the likelihood of violations in the new Clearwater office to which it will assign Grolemund as branch manager. First, it will limit the number of account executives under Grolemund to 15 or less for the first year. Second, it will require another senior registered options principal to supervise the options trading along with Grolemund for the first year. Third, Advest's branch group manager or another Florida branch manager will personally visit Grolemund's office four times during the first year to monitor compliance; during the second year, either he or another Florida branch manager will personally visit Grolemund's office for this purpose at least twice. Fourth, two annual routine compliance monitoring visits will be made, instead of the usual one visit. Finally, the branch group manager personally will review all new account information from Grolemund's office weekly.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Banking and Finance enter a final order granting Grolemund's application for registration as an associated person with Advest, Inc., subject only to the following conditions: First, that Advest limit the number of account executives under Grolemund to 15 or less for the first year; Second, that Advest require another senior registered options principal to supervise the options trading along with Grolemund for the first year. Third, that Advest's branch group manager or another Florida branch manager will personally visit Grolemund's office four times during the first year to monitor compliance and that, during the second year, either he or another Florida branch manager personally visit Grolemund's office for this purpose at least twice. Fourth, that Advest make two annual routine compliance monitoring visits to Grolemund's office, instead of the usual one visit. Finally, that the branch group manager personally review all new account information from Grolemund's office weekly. RECOMMENDED this 21st day of February, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 21st day of February, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-5880 To comply with the requirements of Section 120.59(2), Florida Statutes (1989), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Accepted and incorporated. Rejected in part in that the Department did not consider the order of the Board of Governors of the NASD on appeal from the order of the District 5 Business Conduct Committee on the 1988 "Keel" complaint before giving notice of intent to deny the application. Otherwise, accepted and incorporated. Accepted and incorporated. Rejected in the sense that final action has not yet been taken. As it refers to Department notice of intended action, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate and unnecessary. 8.-10. Accepted but subordinate and unnecessary. Rejected as not proven. Also, subordinate and unnecessary. Accepted but subordinate and unnecessary. First sentence, accepted and incorporated. Second sentence, rejected as not proven exactly when the uniform guidedlines went into effect. Rejected as not proven exactly when the uniform guidedlines went into effect. Accepted and incorporated to the extent not subordinate or unnecessary. 16.-17. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate and unnecessary. Accepted but unnecessary. Rejected as not proven that the system was in operation since 1980. 21.-23. Accepted but subordinate and unnecessary. 24. Accepted and incorporated. 25.-28. Accepted and incorporated. 29. Accepted but subordinate and unnecessary. 30.-36. Accepted and incorporated. Rejected as not proven. Accepted but subordinate and unnecessary. Accepted but subordinate to facts contrary to those found and unnecessary. First clause, accepted; second clause, rejected consistent with the NASD orders. Accepted but subordinate to facts contrary to those found and unnecessary. Accepted but subordinate and unnecessary. 43.-46. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated in the form of the findings of the Board of Governors of the NASD on appeal from the 1988 "Keel" complaint. Accepted but unnecessary. 49.-50. Accepted and incorporated. 51.-52 Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate and unnecessary. Accepted and incorporated. Accepted but subordinate and unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated. Rejected as conclusion of law and unnecessary. Rejected that the orders were entered in 1986 and 1988; otherwise, accepted and incorporated. 5.-7. Rejected as conclusion of law and unnecessary. 8.-12. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but unnecessary. Accepted that the Committee characterized its decision in those terms by way of explaining why it was just to differentiate between Prudential-Bache and its representatives, including Grolemund, and E.F. Hutton and its representatives. However, in fact, the various dispositions were agreed by the parties. It is unnecessary to include this finding. 15.-18. Accepted and incorporated. 19. Accepted but unnecessary. 20.-21. Accepted and incorporated. 22. Accepted but unnecessary. COPIES FURNISHED: Edward W. Dougherty, Esquire Mang, Rett & Collette, P.A. 660 East Jefferson Street Tallahassee, Florida 32302 Margaret S. Karniewicz, Esquire Assistant General Counsel Department of Banking and Finance Legal Section The Capitol Tallahassee, Florida 32399-0350 Hon. Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32399-0350 William G. Reeves, Esquire General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
The Issue The issue is whether the Respondent discriminated unlawfully against the Petitioner by discharging him because of a handicap contrary to Chapter 760, Florida Statutes, and, if so, the nature and extent of financial loss suffered by the Petitioner.
Findings Of Fact The Petitioner, Shannon M. Spence, was employed from March 1993 until May 1, 1993 by the Respondent. The Respondent is an employer as defined by Chapter 760, Florida Statutes. The Petitioner, who earned on average $125/week, was employed by the Respondent as a bouncer and "bar backer", a person who assisted the bartender. On or about April 29, 1993, the Petitioner suffered an on the job injury which was duly reported to the employer and for which the Petitioner was treated at a local hospital pursuant to arrangements made by the employer. The Petitioner's injury was determined to be a right inguinal hernia, and the Petitioner was cautioned against lifting more than 25 pounds and standing for long periods of time. The Petitioner reported for work the following day, and communicated to his supervisor his inability to lift and to stand for long periods of time. His supervisor, Jess Wall or J.W., placed the Petitioner on security detail for the parking lot and entrance. There were additional light duties available for security personnel within the employer's business in which the employee could have been placed. The Petitioner's employment was terminated later that evening. The testimony is conflicting regarding whether the Petitioner was discharged because he was dating another employee, or because he was injured, or quit in sympathy with Jess Wall, who was also terminated on that evening. The most credible evidence is that the Petitioner was discharged because of his injury, but was told it was because he was dating another employee. The prohibition against dating was a new rule, it was applied against the Petitioner without any prior warning, the female employee was not discharged, and the Petitioner was the only person discharged for this activity although there were others who dated employees. The alternative theory that Petitioner quit in sympathy with the head bouncer, Mr. Wall, is specifically rejected for lack of credibility of the various witnesses. The Petitioner subsequently settled his workman's compensation claim arising from this injury with the Respondent for $15,000. No details were received regarding the allocation of moneys for medical and wages. The Petitioner is entitled to back wages from his discharge until the hearing on April 27, 1995, less any mitigation, including any portion of the settlement of his workman's compensation claim attributable to lost wages, occurring after surgical repair of the hernia when the Petitioner was reemployed. The Petitioner is entitled to reasonable costs and attorneys fees.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Commission find that the Petitioner was unlawfully discriminated against by the Respondent, and that the Respondent be ordered to pay the Petitioner his lost wages from May 1, 1993 until April 27, 1995 less any amounts the Petitioner earned during this period and any amounts included in the workman's compensation settlement specifically provided for wages; that the Commission retain jurisdiction for the award of damages and attorney's fees and costs; and the Commission remand the matter for a determination of the attorney's fees and costs and to permit the Respondent to present any evidence in mitigation of its damages. DONE and ENTERED this 20th day of June, 1995, in Tallahassee, Florida. STEPHEN F. DEAN, 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 20th day of June, 1995. APPENDIX The parties filed proposed findings which were read and considered. The following states which of their findings were adopted and which were rejected and why: Petitioner's Recommended Order Findings Paragraph 1,2 Subsumed in Paragraph 1 and 2. Paragraph 3-5 Subsumed in Paragraphs 3-5. Paragraph 6-8 Subsumed in Paragraphs 6-9. Paragraph 9 Subsumed in 3 and 11. Respondent's Recommended Order Findings Paragraphs 1-3 Paragraphs 1-3 Paragraph 4 Rejected because the date was April 29, 1993. Paragraph 5 Subsumed in Paragraphs 4,5. Paragraph 6,7 Rejected as contrary to more credible evidence. Paragraph 8,9 Subsumed in Paragraphs 10,11. COPIES FURNISHED: James P. Tarquin, Esquire Michael B. Staley, Esquire P.O. Box 906190 Ocala, FL 34478 John Daley, Esquire 201 E. Pine Street 15th Floor Orlando, FL 32801 Sharon Moultry, Clerk Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, FL 32303-4113
Findings Of Fact Respondent, at all times pertinent, was a registered real estate salesman holding license number 0314085. This license is currently under suspension as a result of disciplinary action by Petitioner. Respondent was, at all times pertinent, the President and a stock holder in D.S.A.E., Inc. D.S.A.E., in turn, was the owner (or co-owner with another corporation) of a tract of land located adjacent to U.S. Highway 27 in Broward County. Respondent, acting in his capacity as a real estate salesman, sought buyers for segments 1/ of the U.S. 27 property. He had made earlier sales of other property to Mrs. Lottie Kay and her son Michael Kay, and contacted the former in October, 1980, regarding the U.S. 27 property. The D.S.A.E. tract was zoned B-3 (business) on that portion which fronted U.S. 27. The rear segments were zoned A-1 (limited agriculture) and did not front U.S. 27. Initially, Respondent mentioned segments being offered for $60,000 and $24,000. However, Lottie Kay indicated that she could not afford the higher priced segments (which were zoned B-3). Lottie Kay asked Respondent to show her the property, and a visit to the general area was made. However, Respondent told her they could not get to the property which he said was located "on the other side of the construction." After visiting the area, she was not aware of the actual location of her property or of its character. 2/ She continued to believe that the property was "right on" U.S. 27. She based this belief on Respondent's original sales presentation rather than her visit to the area. The segment she purchased is about one quarter of a mile from U.S. 27. Lottie Kay was also confused as to the zoning on the property. She believed it was "commercial" and does not recall being told of the agricultural zoning by Respondent until about a year after the purchase. Her son, Michael Kay, who was present during a part of Respondent's initial sales presentation, heard only the B-3 zoning mentioned. Since he was not present throughout the discussion, he could have missed Respondent's reference, which he claims to have made, to the agricultural zoning on the back segments. On October 8, 1980, Lottie Kay, as buyer, contracted with Respondent on behalf of D.S.A.E. and a third party corporation, as sellers, to purchase "Tract 14" for $24,000 on an "agreement for deed." Under the terms of the contract, Lottie Kay paid $4,000 down and was to pay $215.59 per month thereafter beginning in November, 1980. Lottie Kay made the monthly payments through 1983. When she missed her first two payments in 1984, Respondent offered to reduce the contract price by $2,000 if she would resume monthly payments and make up the missing payments. Lottie Kay agreed to this modification of the contract, but discontinued further payments in April, 1984. Lottie Kay bought this property for speculation in reliance on Respondent's claim that its value would increase substantially in the immediate future. Respondent showed her newspaper clippings which supported his claim that the general area was one of future growth. He predicted her segment would be worth at least $30,000 in one year and stated that as to possible appreciation, "The sky's the limit." Respondent did not, however, point out that Lottie Kay's property could not be resold for any use other than agriculture since her segment was too small for even a home site under the existing zoning. Respondent also neglected to advise her that the property was underwater much of the year, and would have to be filled and probably permitted before any development could take place. The testimony of a real estate appraiser called by Petitioner established that the property was worth about $750 when purchased by Lottie Kay in October, 1980. 3/ This valuation was based on the witness' study of nearby land sales over a period of years as well as his inspection of the area in which the Kay segment is located. Respondent attempted to establish a higher market value by producing various warranty deeds whereby he or his affiliates had sold similar segments to other buyers for amounts approximating that agreed to by Lottie Kay. These sales do not establish value but, rather, indicate the gullibility of other buyers in making such purchases. After she fell behind in her payments, Lottie Kay tried to resell her property through Respondent in reliance on his claim at the time of his initial sales presentation that he could resell it for her in one week. When requested to do so he was unable to produce any prospective buyer. Thus, there appears to be no real market for this property, other than that generated by Respondent in his initial sales campaign. Lottie Kay did not consult an attorney or have the land surveyed or appraised prior to contracting for the purchase. Rather, she trusted Respondent who she knew to be a real estate professional. She was also aware that he was an owner of the property, but still believed she could rely on his statements that the current market value of her segment was at least $24,000 and that future profits were assured. Respondent attacks the fairness of these proceedings on the alleged misconduct of Petitioner's investigator, who encouraged Lottie Kay to come forward after she (with the help of her son) had filed a complaint with Petitioner. The investigator made statements to the Kays which indicated his belief that Respondent was engaged in fraudulent land sales, and was a menace to the public. Although the investigator's statements to the Kays were gratuitous and inconsistent with his fact finding role, there is no indication that such statements resulted in any false testimony or other unreliable evidence. Respondent notes that Lottie Kay continued to make payments on her contract with Respondent even after she had filed a complaint with Petitioner and reasons that she must have considered the property a worthwhile investment. Lottie Kay demonstrated through her testimony and recitation of her dealings with Respondent that she is gullible and imprudent in financial matters. Thus, her continued investment of funds in this property indicated lack of prudence rather than an informed belief that the property had any substantial value.
Recommendation From the foregoing, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of misrepresenting property value as charged in Count II of the Administrative Complaint, in violation of Subsection 475.25(1)(b), Florida Statutes, and suspending his license as a real estate salesman for a period of three years to begin upon completion of his current license suspension period. DONE and ENTERED this 3rd day of December, 1984 in Tallahassee, Florida. R. T. CARPENTER 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 3rd day of December, 1984.
The Issue The issue is whether Respondent violated the Florida Civil Rights Act of 1992, as alleged in the Charge of Discrimination filed by Petitioner on January 7, 1998.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In this discrimination case, which has an extremely limited factual record and is replete with hearsay, Petitioner, Thornton Alan Bline, who was 52 years of age in October 1997, contends that Respondent, Automax and Pearson Group, unlawfully terminated him on account of his age. Respondent denies the allegation and contends that Petitioner was terminated because of poor performance. A preliminary decision on the merits of the claim was never reached by the Florida Commission on Human Relations (Commission). Respondent is a car dealer that began business in the summer of 1997. Although there is no specific evidence on the issue of whether Respondent is an employer within the meaning of the law, monthly compensation reports received in evidence as Respondent's Exhibits 1 and 2 reflect that during August and September 1997, Respondent employed five team leaders, including Petitioner. Thus, the total number of employees would have been greater. Even so, the record does not show the precise number of persons employed by Respondent, and the undersigned is unable to determine if Respondent is an employer within the meaning of the law and thus subject to the Commission's jurisdiction. Petitioner was hired by Respondent on May 30, 1997, as a floor manager. That position required Petitioner to manage a small team of salespersons who assisted customers in purchasing automobiles. The team's performance was measured by the number of automobiles (units) sold each month. In August and September 1997, Petitioner's team had the lowest sales volume of any team. More specifically, in August 1997, out of 80 units sold by all teams, Petitioner's team sold only 10 units; in September 1997, out of 97 units sold by all teams, Petitioner's team sold only 4. At hearing, Petitioner agreed that these numbers were accurate and that his sales "were down" during that period of time. On October 1, 1997, Petitioner was summoned to the office of the general manager, "Bud" Holian, who advised him that he was being terminated due to low sales performance. At that brief meeting, Holian explained that he "felt bad" about the decision, especially "with all [Petitioner had] done," but that he had to let Petitioner go. Petitioner contended that during the conversation, Holian had also stated that the company needed "someone younger and fresher to liven up the team." He further contended that another floor manager named "Rick" overheard the conversation and could confirm these remarks. However, Rick did not appear and testify. Neither was there was any other corroborating or independent evidence to confirm this allegation. Holian, who is older than Petitioner, denied making the comment. He also established that after Petitioner was terminated, he hired two other salesmen who were older than Petitioner. Finally, the record does not show who replaced Petitioner and the age of that individual. In light of the foregoing, there is insufficient evidence to find that Respondent's employment decision was grounded on discriminatory animus in any respect, or that a discriminatory reason motivated the employer in its actions. Rather, the more persuasive evidence supports a finding that Petitioner was terminated solely because of poor sales performance.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Human Relations enter a final order dismissing, with prejudice, the Charge of Discrimination. DONE AND ENTERED this 9th day of August, 2000, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (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 9th day of August, 2000. COPIES FURNISHED: Thornton Alan Bline 5720 Northeast 4th Street Ocala, Florida 34470 Bernard B. Holian, General Manager Automax and Pearson Group 1918 Southwest 17th Street Ocala, Florida 34470 Sharon Moultry, Clerk Florida Commission on Human Relations Building F, Suite 240 325 John Knox Road Tallahassee, Florida 32303-4149 Dana A. Baird, General Counsel Florida Commission on Human Relations Building F, Suite 240 325 John Knox Road Tallahassee, Florida 32303-4149
The Issue The issue is whether the Respondent is guilty of misrepresentation, fraud, dishonest dealing, culpable negligence, or breach of trust in a business transaction contrary to Section 475.25(1)(b), Florida Statutes; and Whether, if the above allegations are proven, the Respondent is so incompetent, negligent, dishonest or untruthful that the money, property transactions and rights of investors or others with whom he may sustain a confidential relation may not be entrusted to him by virtue of a second violation of Chapter 475, Florida Statutes, contrary to Section 475.42(1)(o), Florida Statutes.
Findings Of Fact The Respondent, Robert E. McMillan, III, is and was at all times material to the administrative complaint a licensed real estate broker holding license number 0317361. The Commission is charged under Chapter 475, Florida Statutes, with regulation of real estate brokers and salesmen. The Respondent was previously disciplined by the Commission by a Final Order dated September 2, 1992 in which the Commission found the Respondent guilty of violation of Sections 475.25(1)(b),(e),(k), and 475.42(1)(e), Florida Statutes. Dr. Manuel S. Couto and his wife desired to have a home built on Block 2, Lot 12 Marineland Acres, 1st Addition, Plat Book 5, page 50. They approached Respondent's business, which was a construction and real estate development concern, and spoke with Randy Joyner, a salesman employed by the Respondent and the brother of the Respondent's late wife, who had sold the Coutos the lot. The Respondent offered to build a particular house for the Coutos for $50,000. The Coutos counteroffered to purchase the house for $30,000 cash and to convey to the Respondent two lots described in the contract as: Section 29A, Block 7, Lot 4, Palm Coast, Florida, and Section 29A, Block 7, Lot 5, Palm Coast, Florida. Dr. Couto bought Lot 4 for $3,900, and Lot 5 for $4,900; however, he paid a total, including interest, of $15,264.80 for the two lots. Palm Coast is a real estate development located in the western portion of Flagler County in which the Respondent's business was located, and he was not particularly familiar with the area in which the Coutos' lots were located. The Respondent accepted the counteroffer, above, upon the recommendation of Joyner. The Respondent believed the lots in question to be valued at $10,000 each. The Coutos paid the Respondent $30,000, and the Respondent began construction. Shortly after commencement of the project, it was determined that the Respondent would have to do considerable site work in order to install a septic tank. The costs of this work, $5,400, was paid by the Respondent, and Dr. Couto wrote the Respondent an additional check in the amount of $1,900. In addition, Dr. Couto made numerous changes to the plans which raised the costs of the construction for which he was obligated to pay under the contract. Work progressed on the project until the Respondent became aware that the lots which were to be transferred were not valued at $10,000. A dispute arose between the Respondent and the Coutos regarding the Coutos paying the difference between the value of the lots and $20,000. When the dispute went unresolved, the Respondent ceased work on the project. Thereafter, the Respondent again began work on the project because of Dr. Couto constant badgering; however, the underlying disagreement about the value of the lots was unresolved. The Respondent finished the house at a cost to him of $55,004.82, and the Coutos paid him $38,425. When the second lot at Palm Coast was to be transferred, it was arranged to have the Coutos transfer the lot directly to the new purchasers, with the money, $4,690.37, due to the Respondent to be held in escrow pending payment of the subcontractors and materialmen building the Coutos' house. Dr. Couto prepared an affidavit that all the contractors had been paid for the Respondent to sign. It is this affidavit dated January 16, 1992, which purports to bear the signature of the Respondent notarized by Martha B. Bennett, Notary Public. The Respondent denies that the document bears his signature, and asserts that Dr. Couto signed the affidavit. Dr. Couto states that he saw the Respondent sign it, and the Respondent's secretary notarize it. The authenticity of this document was put in question by Respondent's answer to the administrative complaint, and the notary was not called as a witness. Dr. Couto and his attorney had attempted unsuccessfully to obtain similar affidavits from the Respondent, who had refused to sign them. At the time the affidavit was prepared, Dr. Couto was aware that materialmen had not be paid. The purported purpose of the affidavit was to release the funds retained by the title company. However, it was Dr. Couto who prepared the affidavit, and it was not presented to the title company to obtain the release of the funds. The affidavit was retained by Dr. Couto, and presented to the title company in June 1992, by Dr. Couto together with letters from Respondent stating that he was not going to pay the subcontractors. Upon the affidavit and letters, the title company paid the $4,690.37 to Dr. Couto. Given the background of the affidavit, the contradictory testimony about its execution, and the absence of additional authentication, the signature of the Respondent is not accepted as genuine. In spring 1992, various materialmen and subcontractors filed liens on the house being built for the Coutos. In order to clear the title to his home, Dr. Couto had to settle with the lienholders and pay them $14,878.18. As stated above, Dr. Couto received the proceeds from the sale of the second lot, $4,690.37. Subsequently, the matter was brought to the attention of the state's attorney. The Respondent paid the Coutos $3,000 in cash, and the state's attorney dropped the case against the Respondent after handwriting analysis was completed on the affidavit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the administrative complaint be dismissed. DONE and ENTERED this 29th day of November, 1994, in Tallahassee, Florida. STEPHEN F. DEAN 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 29th day of November, 1994. APPENDIX The Petitioner submitted proposed findings which were read and considered. The following states which of the findings were adopted and which were rejected and why: Petitioner's Recommended Order Findings Paragraph 1 Paragraph 2 Paragraph 2 Paragraph 1 Paragraph 3 Paragraph 4 Paragraph 4 Paragraph 9 Paragraph 5,6 Paragraph 8,9,10 Paragraph 7 Rejected as contrary to better evidence, See Paragraph 13 Paragraph 8 Paragraph 15 Paragraph 9 Paragraph 16 COPIES FURNISHED: Steven W. Johnson, Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Clifford A. Taylor, Esquire 507 East Moody Boulevard Bunnell, Florida 32110 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Jack McRay, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether Respondent discriminated against Petitioner on the basis of her race or color in violation of Chapter 760, Florida Statutes (2003); and whether Respondent retaliated against Petitioner in violation of Chapter 760, Florida Statutes.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following findings of facts are made: Respondent, whose correct name is AIG Marketing, Inc. is a subsidiary of American International Group, Inc. ("AIG"). Respondent supplies marketing services for AIG. Respondent is an employer as defined by Subsection 760.02(7), Florida Statutes (2003). Petitioner is an African-American female. She began working for Respondent as an "insurance consultant" on April 22, 2003. Petitioner resigned her employment by letter dated February 17, 2004. Petitioner's last day at work for Respondent was March 2, 2004. Petitioner worked at Respondent's facility in Seminole County, Florida. An insurance consultant's primary job responsibility is to answer incoming telephone calls from prospective customers seeking information concerning automobile insurance. Respondent has an anti-discrimination and anti- retaliation policy. Respondent has a published policy specifically prohibiting discrimination and retaliation. The policy states that discrimination, including that based upon race and color "is strictly prohibited." The policy states that any employee found to have engaged in any form of discriminatory harassment will be subject to appropriate disciplinary action, up to and including termination. The policy states that Respondent will not tolerate any retaliation against any employee for making a complaint, bringing inappropriate conduct to the Respondent's attention, or for participating in an investigation of an alleged act of harassment. Respondent's management employees support and enforce its policies against discrimination and retaliation. After she was hired in April 2003, Petitioner received training for a period of approximately 10 weeks. Thereafter, on approximately July 1, 2003, she was placed on a "team" with other insurance consultants. The Petitioner's immediate supervisor was Melody Garcia-Muniz. While on Ms. Garcia-Muniz' team, Petitioner also received instruction, also called "coaching," from Nirmala Sookram. Ms. Garcia-Muniz is an Asian female. Ms. Sookram is an Indian female. Approximately one month after she was placed on Ms. Garcia-Muniz' team, on or about August 2, 2003, Petitioner had a confrontation with Ms. Sookram. Thereafter, by correspondence dated August 2, 2003, Petitioner wrote Respondent's Human Resources Office and Ms. Garcia-Muniz complaining of "the work condition, I have been experiencing with team leader Nirmala Sookram." As a result of Petitioner's August 2, 2003, letter, Respondent replaced Ms. Sookram as the team coach with another coach. Respondent also immediately investigated the allegations contained in Petitioner’s August 2, 2003, correspondence. This investigation was conducted by Ms. Garcia-Muniz and another management employee Dawn Bronwnlie. No evidence of discrimination was revealed. In approximately September or October 2003, Petitioner was transferred from Ms. Garcia-Muniz' team to a team supervised by Beverly Swanson. Ms. Swanson is a Caucasian female. This transfer was done pursuant to a reorganization of Respondent's shifts. Respondent had two business practices which are relevant to this matter and which are acknowledged by Petitioner. First, Respondent requires that its insurance consultants respond to in-bound calls from customers as soon as possible. Respondent has a policy prohibiting insurance consultants from making out-bound calls if there are in-bound calls waiting. Out-bound calls would typically be follow-up calls between an insurance consultant and a prospective customer. Second, Respondent has a policy prohibiting one insurance consultant from accessing an insurance quote being worked on by another insurance consultant. This policy is intended to prevent one insurance consultant from "stealing" a customer from another insurance consultant. Petitioner consistently violated Respondent's policy against making out-bound calls when in-bound calls were waiting. She was counseled with respect to this policy on August 5, 2003. Petitioner continued to violate this policy and received a verbal warning on September 19, 2003. The verbal warning confirmed Petitioner had been counseled in August with respect to this policy. The verbal warning confirms that for a 14-day period Petitioner made 649 out-bound calls while only receiving 444 in-bound calls. The verbal warning stated that at no time should Petitioner's out-bound calls exceed her in-bound calls. With respect to Respondent's policy prohibiting one insurance consultant from accessing a quote for a customer of another insurance consultant, Petitioner was advised on November 7, 2003, about the proper procedures to handle such situations. Though Petitioner claimed that she did not know accessing a quote for another insurance consultant's customer was inappropriate until November 7, 2003, she admits that on that date she was so advised and from that date forward knew that it was a violation of Respondent's policies. Nonetheless, on December 10, 2003, Petitioner's then supervisor Ms. Swanson was advised that Petitioner had accessed a quote for another insurance consultant's customer in violation of Respondent's policies. This occurred on December 9, 2003. Two days later on December 12, 2003, another insurance consultant, Steve Mintz advised Ms. Swanson that Petitioner had also accessed one of his insurance quotes. Ms. Swanson investigated and determined that Petitioner had, in fact, violated Respondent's policies by accessing the quote of another insurance consultant's customers. As part of that investigation, Ms. Swanson interviewed Petitioner and reviewed reports. Petitioner's statements were inconsistent with the reports, and Ms. Swanson ultimately determined that Petitioner had been untruthful with her during the investigation. As a result of Petitioner's violation of the policy, on December 16, 2003, Ms. Swanson issued Petitioner a written warning for inappropriate sales conduct. The written warning noted that Ms. Swanson had thoroughly investigated "several" complaints about Petitioner's sales conduct and confirmed that Petitioner had processed sales incorrectly despite several discussions with other supervisors as well as Ms. Swanson. The written warning also confirmed that Petitioner had been untruthful with Ms. Swanson during Ms. Swanson's investigation into this matter. As a result, Ms. Swanson placed Petitioner on a written warning which advised her that should her practices continue, her employment would be terminated. In accordance with Respondent's policies, Petitioner was ineligible to post for a position, switch shifts, or work overtime. Immediately after the December 16, 2003, meeting during which Ms. Swanson issued the written warning, Petitioner contacted Respondent's Human Resources department. As a result, Louisa Hewitt, Respondent's Human Resources professional, undertook an independent investigation to determine the accuracy or inaccuracy of Ms. Swanson's findings which formed the basis for the written warning. Ms. Hewitt is a Hispanic female. Ms. Hewitt's independent investigation determined that Petitioner had, in fact, improperly processed sales and inappropriately accessed quotes. Accordingly, Ms. Hewitt met with Petitioner on December 31, 2003. In attendance was another of Respondent's managers Patricia Brosious. During this meeting, Ms. Hewitt advised Petitioner that the written warning was appropriate. Despite the fact that the December 16, 2003, written warning prohibited Petitioner from switching shifts, Respondent allowed Petitioner to switch shifts in order to allow her to care for an ill relative. This request was received on or about December 21, 2003, and granted on December 22, 2003. Dawn Bronwnlie (one of the Respondent's assistant managers who investigated Petitioner's August 2003 complaint) requested the accommodation on Petitioner's behalf by e-mail dated December 21, 2003, sent to, among others, Petitioner's immediate supervisor Ms. Swanson. Petitioner and Respondent management employee Patricia Brosious were copied on the e-mail. Approximately one month later, Petitioner again requested a shift change. By e-mail dated January 26, 2004, Respondent's management employee Patricia Brosious informed Petitioner of all of the shifts that were open at that time to which a transfer was possible. Ms. Brosious copied Ms. Hewitt and Timothy Fenu on this e-mail. Mr. Fenu is the manager of Respondent's facility in Lake Mary, Florida, and the highest- ranking employee of Respondent at that facility. On January 27, 2004, Petitioner responded to Ms. Brosious' e-mail, which had advised Petitioner of the shifts that were available. In response, Mr. Fenu sent an e-mail to Petitioner advising her that the shifts offered to her were based on business need and current unit sizes. Mr. Fenu advised Petitioner that her response was inappropriate and requested her to advise Respondent if she desired to change shifts. After initially scheduling a meeting with Mr. Fenu, Petitioner canceled the meeting by e-mail dated February 10, 2004. Petitioner resigned her employment February 17, 2004. Petitioner presented no direct evidence of discrimination or statistical evidence of discrimination.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Commission on Human Relations enter a final order dismissing Petitioner's Petition for Relief. DONE AND ENTERED this 12th day of January, 2006, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 12th day of January, 2006. COPIES FURNISHED: Denise Crawford, Agency Clerk Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Cynthia McGee Post Office Box 550423 Orlando, Florida 32855 Daniel C. Johnson, Esquire Carlton Fields, P.A. Post Office Box 1171 Orlando, Florida 32802 Cecil Howard, General Counsel Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue Whether Respondents committed the offenses alleged in the Administrative Complaint and the penalties, if any, that should be imposed.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular, Chapters 455 and 475, Florida Statutes, and Title 61J2, Florida Administrative Code. At all times pertinent to this proceeding, Respondent, Gerry Sullivan & Associates Realty, Inc., was a corporation registered as a real estate broker in the State of Florida, having been issued license number 0215569 in accordance with Chapter 475, Florida Statutes. The last license issued for that corporation was at the address of 7169 West Broward Boulevard, Plantation, Florida. At all times pertinent to this proceeding, Respondent, Geraldine R. Sullivan, was a licensed real estate broker in the State of Florida, having been issued license number 0086238 in accordance with Chapter 475, Florida Statutes. At all times pertinent to this proceeding, Respondent, Geraldine R. Sullivan, was the qualifying broker and office manager of the corporate Respondent. At all times pertinent to this proceeding, Jim Sullivan and Pamela Sullivan were real estate salespersons in the State of Florida and employed by the corporate Respondent. Jim Sullivan is the son of Geraldine R. Sullivan and the husband of Pamela Sullivan. On June 16, 1997, Elaine P. Martin entered into a listing agreement with the corporate Respondent to sell her condominium for the price of $32,900. The listing agreement provided for the seller (Ms. Martin) to pay a brokerage commission of 6% that would be reduced to 5% if Jim Sullivan or Pamela Sullivan found the buyer without the involvement of another broker. The listing agreement also provided that Ms. Martin would pay a processing fee in the amount of $150.1 The listing agreement did not refer to a transaction fee.2 Ms. Martin did not agree to pay any fees other than the commission and the processing fee. In 1996, the corporate Respondent began a practice of charging sellers in certain transactions a fee, referred to as a transaction fee, that was in addition to the processing fee and the commission. The transaction fee was used by the salesperson to pay the salesperson's "facilitator," a person employed by the salesperson to run errands to facilitate the closing of the transaction. Examples of the type errands performed by the facilitator included meeting persons at the property to perform inspections and delivering documents. The practice of charging a transaction fee was not uncommon in Broward County, but it was not standard practice. Whether a particular seller would be charged a transaction fee depended, in part, on the listing salesperson. Typically, if a salesperson employed by the corporate Respondent did not us a facilitator, no transaction fee would be charged. The minutes of the Florida Real Estate Commission for July 16-17, 1996, contain the following entry: It was decided that as long as there is disclosure to all parties involved, the transaction fees indicated on closing statements is not a violation of F.S. 475. The customary practice of the corporate Respondent in June of 1997 was for its salesperson to complete a "net sheet" at the time the listing agreement is executed. The "net sheet" is a good faith estimate of the seller's expenses and reflects the estimated amount the seller will net from the transaction. The evidence established that Respondent, Geraldine R. Sullivan, and Pamela Sullivan could not locate in the Martin file a net sheet was prepared on or about the time Ms. Martin executed the listing agreement on June 16, 1997. From that evidence, and from the testimony of Ms. Martin, it is found that Jim Sullivan did not complete a net sheet when he and Ms. Martin executed the listing agreement. The listing agreement created a principal/agent relationship between Ms. Martin, as the seller, and the corporate Respondent, as the agent. At all times pertinent to this proceeding, the corporate Respondent and Geraldine R. Sullivan, as the qualifying broker of the corporate Respondent, were the agents of Ms. Martin and owed her the fiduciary duties of an agent. In connection with the subject listing agreement, Ms. Martin executed an Agency Disclosure Statement which set forth the fiduciary duties owed by the agent to the principal, in pertinent part, as being the ". . . fiduciary duties of loyalty, confidentiality, obedience, full disclosure, accounting and the duty to use skill, care and diligence." In addition, the statement set forth that the agent owed the duty of honesty and fair dealing.3 A buyer working through another real estate broker made an offer to purchase the Martin property for the sum of $30,000. The offer, dated June 22, 1997, was presented to Ms. Martin by Pamela Sullivan. Because another real estate broker was involved, the real estate commission was based on 6% of the sales price. On June 22, 1997, Pamela Sullivan discussed the offer with Ms. Martin by telephone and informed her, for the first time, of the transaction fee. Later that day, Pamela Sullivan and Ms. Martin met and Pamela Sullivan prepared a "net sheet" that reflected the seller's estimated closing costs. The transaction fee in the amount of $3004 was reflected on the net sheet as an expense of the seller. As of June 22, 1997, Pamela Sullivan knew or should have known that the file on the Martin transaction maintained by her office did not contain a net sheet that was executed at the same time the listing agreement was executed. Prior to signing the contract or the net sheet on June 22, 1997, Ms. Martin placed a question mark next to the line on which the transaction fee was disclosed. Ms. Martin questioned the charge because she did not understand what was being done to earn that fee. Ms. Martin did not accept the explanations Pamela Sullivan gave for the transaction fee. Ms. Martin thereafter had Pamela Sullivan insert the following as a special condition of the contract: The seller reserves the right to have her attorney review the contract at his earliest opportunity. After the special condition was signed, Ms. Martin signed the contract and the net sheet. The net sheet was intended to be informational. By signing the net sheet, Ms. Martin did not intend to agree to pay the $300 transaction fee. Ms. Martin did not agree in writing or verbally to pay the transaction fee. Between June 22 and June 25, 1997, Pamela Sullivan, on behalf of the corporate Respondent, reduced the amount of the claimed transaction fee from $300 to $200. Following the execution of the Sales Contract, Ms. Martin had her attorney review the contract and the net sheet. Ms. Martin informed her attorney by memo dated June 25, 1997, in pertinent part, as follows: . . . We disputed the Transaction Fee of $300.00 and Century 21 lowered it to $200. We asked Pam Sullivan for a break down (sic) on the $200.00 cost. She refused to provide any; stated it was the cost of doing business. Since the housing prices in Broward County have not increased, they charge this extra fee along with their normal commission. . . . Ms. Martin sent a copy of her memo to Pamela Sullivan. Ms. Martin's attorney accepted the sales contract without any changes and informed her that he would address the issue of the transaction fee at the time of the closing. On the day of the closing, Ms. Martin's attorney telephoned Respondent, Geraldine R. Sullivan, to discuss the transaction fee. Geraldine R. Sullivan would not agree to waive the transaction fee after she learned that there was a signed net sheet. She did not realize that there was no net sheet prepared when the listing agreement was first executed. This was the only direct dealing Respondent, Geraldine R. Sullivan, had with this transaction. Between June 25, 1997, the date of Ms. Martin's memo, and July 7, 1997, the date of the closing, neither Ms. Martin nor her attorney voiced additional objection to the transaction fee.5 The transaction closed on July 7, 1997. The sum of $200, representing the amount of the disputed transaction fee, was placed in escrow by the closing agent, where it remained at the time of the formal hearing. All other fees and costs were paid at closing, including a brokerage commission of $1,800 (which was split with the realtor representing the buyer) and a processing fee of $150 (which was retained by the corporate Respondent).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered that finds the corporate Respondent guilty of violating Section 475.25(1)(b), Florida Statutes, and finds Geraldine R. Sullivan not guilty of that charge. It is further RECOMMENDED that the corporate Respondent be reprimanded and fined in the amount of $1,000. DONE AND ENTERED this 4th day of August, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 4th day of August, 1998
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's registration as a real estate salesperson, without prejudice to the filing of a proper application. DONE and ENTERED this 26th day of October, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Fred Langford, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 s. Grace Fararo Mazon Rt. 1, Box 40 R-5 Gainesville, Florida 32601 Ms. Grace F. Mazon c/o Marguerite L. Rhea 816 North West 13th Street Gainesville, Florida 32601
