Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts were found: Respondent, Robert E. Zimmerly (Zimmerly) is a licensed real estate broker having been issued license No. 0127833, with last known address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a real estate broker. Respondent, Haines City Realty, Inc. (Haines City) is a licensed corporate real estate broker having been issued registration No. 0146307, with its last known business address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a corporate real estate broker. Haines City's license is currently in an inactive status. At all times pertinent to these proceedings, Zimmerly was the sole broker, of and for Haines City, and was its President. Several weeks prior to April 23, 1981, the date N. B. Willoughby (Willoughby) signed the first offer to purchase the property (offer), Zimmerly along with Barbara Costello (Costello) and Chancellor I. Hannon (Hannon) showed the property described as "Lots 230 and 233 of the Lucerne Park Fruit Association Subdivision, P1at Book 3, Page 67, Public Records of Polk County, Florida" (property), consisting of approximately 20 acres and contiguous to the city limits of Winter Haven, Florida to Willoughby, a prospective buyer, along with Ray Workman (Workman), Willoughby's associate. Costello at the time was a sales person for American Realty of Haines City, now known as American Realty of Polk County, Inc., (American Realty). Zimmerly was representing Haines City. Hannon was representing Ridge Holding Association, Inc., (seller) the owner of the property. The property had originally been listed with Haines City but presently was considered as being listed with American Realty. Subsequent to having seen the property, Willoughby instructed Zimmerly to prepare an offer to purchase, with a purchase price of $70,000, subject to the condition, among others, that the seller would obtain a special exception for a mobile home park. A deposit check for $500 was submitted along with the offer. Costello submitted the offer to Hannon for seller. Sometime around April 25, 1981, Hannon notified Costello that the seller had rejected Willoughby's offer because of the condition concerning a special exception for mobile home park. Within a day, Costello notified Zimmerly of the rejection. Zimmerly requested rejection in writing which Hannon did not furnish until May 11, 1981 due to his involvement in personal matters. Willoughby was not notified of seller's rejection of his first offer until around May 11, 1981. On April 27, 1981, after a verbal notification by Costello of rejection of Willoughby's offer, Zimmerly prepared and submitted an offer to purchase (Ridge offer) from Ridge Crest, Ltd., Agent, (This was apparently meant to be Ridge Crest Villas, Ltd.) signed by Bob Zimmerly, a general and limited partner, to seller, with a purchase price of $72,000, subject to the condition, among others, that seller furnish a letter requesting a special exception for mobile homes park. The Ridge offer was submitted to Hannon for the seller and was accepted by seller on May 5, 1981. On May 18, 1981 Willoughby submitted his second offer to purchase (second offer), with deposit, to seller through Zimmerly. The second offer was identical to the first offer except for the deletion of the condition requiring a special exception for mobile home park. Zimmerly did not advise Willoughby at this time, or at any other time material to the transaction, that Zimmerly was involved in an attempted purchase of the property through Ridge Crest Villas, Ltd. even though the Ridge offer had been accepted on May 5, 1981. Although the Ridge offer indicated a closing date of May 15, 1981, the transaction did not close for reasons not clear in the record, until May 27, 1981. The warranty deed and the mortgage deed executed on day of closing shows Ridge Crest Villas, Ltd. as the Grantee and Mortgagor, respectively. The deposits submitted with both of Willoughby's offers were timely refunded by Zimmerly. Willoughby was notified by Hannon after the closing that his second offer was rejected. On November 6, 1980, a limited partnership known as Ridge Crest Villas Ltd., was filed with the Secretary of State. The record is not clear, but apparently this limited partnership was involuntarily dissolved for failure to file an annual report and on October 14, 1981, an identical limited partnership, with the same name was filed with the Secretary of State. Both limited partnerships listed Robert E. Zimmerly as a general partner with 5 percent interest and listed Robert E. Zimmerly and Dolores J. Zimmerly as limited partners with 45 percent and 50 percent interests, respectively. Respondent Zimmerly's testimony was that: (1) he wanted a written (firm) rejection before notifying Willoughby because of previous dealings with Willoughby; (2) it is not uncommon to use limited partnerships in real estate transactions because of the availability of tax advantages when using a limited partnership; (3) he was acting for Jones and Destefano when he made the offer and purchased the property in the name of the limited partnership; (4) he intended for Jones and Destefano to own the property through the limited partnership and took a promissory note for the down payment; (5) he did not advise Willoughby of his involvement in the purchase of the property, other than in general terms "that some fellows from up north are interested" (Destefano is "from up North") because he had been taught in real estate schools, and it was his policy, not to discuss one prospective buyer's offer with another prospective buyer; and (6) it is common practice to have a "backup" offer as with Willoughby's second offer because you are never sure if a particular transaction will close. Mainly, this testimony went unrebutted by the petitioner.
Recommendation Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that respondent be found guilty of a violation of Section 475.25(1)(b), Florida Statutes 1981) For such violation, considering the mitigating circumstances surrounding the violation, it is RECOMMENDED that the Board issue a letter of Reprimand and impose an administrative fine of $1,000.00. DONE and ENTERED this 10th day of May, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 10th day of May, 1985. COPIES FURNISHED: James R. Mitchell Staff Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street Suite 308 P.O. Box 1900 Orlando, Florida 32802 Arthur C. Fulmer, Esquire P.O. Drawer J Lakeland, Florida 33802 Mr. Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the state of Florida, in particular Section 20.30, Florida Statutes; Chapters 120, 455 and 475, Florida Statutes and the rules promulgated in accordance with those statutes. Respondent is now and was at all times associated with this administrative complaint a licensed real estate broker in the state of Florida having been issued license number 0251002 under the authority of Chapter 475, Florida Statutes. Respondent's last license was issued as a real estate broker with the firm of Eastern Marketing, Inc. which is located at 17841 U.S. Highway 441, 3 Mount Dora, Florida 32757. RESPONDENT'S ROLE At the time of the hearing, Respondent had been involved in the real estate profession for approximately 18 years. This real estate practice has been exclusively in the state of Florida. In addition to being a real estate broker, Respondent is licensed as a general contractor in Florida and as a mortgage broker in the state. His general contractor's license is a certified license. At times relevant to this inquiry, Respondent was a real estate broker with Collins and Associates, Inc., a real estate brokerage firm. He also had affiliation with Collins Builders, Inc., a licensed general contracting firm. He was a one half owner in Tallahassee Properties, a Florida general partnership in which the other ownership was held by W. Ronnie Collins, Respondent's brother. All of these firms did business in Florida and particular as these firms are involved with the issues in dispute, they did business in Tallahassee, Florida. At times relevant to this inquiry, Respondent was involved in a sales promotion program which has been referred to as a trade-in program. In essence, this program was designed to allow persons who had purchased residences from a firm or through affiliated Collins companies to turn over the initial residence to Tallahassee Properties in exchange for a new home bought from Collins Builders, Inc. with the builder using the real estate services of Collins and Associates, Inc. to sell the new home. The house that was being traded was deeded to Respondent or one of the companies with which he was affiliated. In this case, the company with which Respondent was affiliated with which had property deeded to it was Ralco, Inc. Those persons who were trading one home for another had been solicited by Collins and Associates, Inc. as a realtor in an advertising program. No realtor was involved in making commissions associated with the closing that took place between the sellers who were trading in a home and Tallahassee Properties, Respondent and Ralco, Inc. with whom he was affiliated. This arrangement was designed to stimulate sales of the new home being purchased. The traded homes typically had mortgages. Tallahassee Properties not only took possession of the traded or exchanged homes but was responsible for the activities associated with the closing of the transaction, to include assumption and payment of mortgages associated with the exchanged property. As grantee on the deeds in the traded homes Respondent and Ralco, Inc. were also responsible for assumption and payments. As Respondent identified in his testimony, he and his brother W. Ronnie Collins; Collins and Associates, Inc.; Collins Builders, Inc. and Tallahassee Properties were anticipated as being the individuals to apply for the assumption of loans with the lending agencies who held the mortgages on the traded property. W. Ronnie Collins was also one of the names in the overall scheme in which the traded-in property could be placed as grantee. Approximately 80 homes were traded over a period of 6 or 7 years. The properties in dispute in this case were among them. Respondent had authorized Tallahassee Properties and in particular his brother W. Ronnie Collins as managing partner of that partnership, to place the properties in Respondent's name, W. Ronnie Collins' name or any of several companies affiliated with Respondent in furtherance of identifying a grantee that the mortgage holder would allow to assume the mortgage. Respondent's expectation was that Tallahassee Properties and the title company involved in the closing of the transaction associated with the traded property would facilitate the assumption arrangement with the mortgage holder. The title company used in the cases that are at issue here was Capital Abstract and Title, Inc. In the closings for the traded homes, which are at issue in this case, the evidence presented at hearing which may be relied upon for fact finding did not reveal what attempts were made to have the mortgage holders for the traded homes ultimately accept the substitution of Respondent, his brother or one of the companies with which he was affiliated as parties responsible for the existing mortgages on the traded properties. The reason which Respondent gave for allowing his brother, W. Ronnie Collins to act in his behalf in Tallahassee Properties was that he felt that it was impossible for him to involve himself in that business and its day to day process and at the same time be active in Collins and Associates, Inc. and Collins Builders, Inc. Therefore, he allowed W. Ronnie Collins to act for him in the business of Tallahassee Properties. This explanation has not been disputed and being tenable is credited as true. In accepting deeds related to the traded property, as will be described in the individual instances that follow, Respondent recognized that he had obligated himself to take the responsibility for assumption of and payment of the mortgage. Respondent has no direct knowledge of whether any of the trade-in transactions were followed up by gaining permission from the mortgage holder to allow someone other than the original mortgagor to become responsible for the mortgage payments. The contracts for obtaining the traded-in homes were executed by Tallahassee Properties. Nonetheless, as described, Respondent was given a deed to some of the properties purchased, to include properties in dispute here. Respondent never orally or in writing advised the sellers of the traded property that the routine mortgage payments associated with the traded property and the overall mortgage obligation would no longer be the responsibility of those sellers. In one of the cases which is at issue here involving the trade-in property of John M. and Jeanne B. Miller, Respondent stated that he received their traded property as grantee on the deed. In fact Ralco, Inc. was grantee. When asked about whether he had assumed the obligation for the mortgage that existed on that home, Respondent replied that he had assumed the loan. When asked if he explained the fact to that assumption to the Millers, he pointed out that he had never talked to the individuals. When asked if he had directed anyone in any of his companies or his real estate company in particular to explain the details of the transaction, Respondent pointed out that Collins and Associates, Inc. as realtor, and as a licensed broker had trained each associate to explain all of the rules and procedures associated with Fannie Mae, Freddie Mac, FHA, VA and HUD loans and that Respondent as the broker of those associates would expect that the associates would explain everything to the Millers. Whether the Millers were informed about such matters by Collins and Associates, Inc. employees was not proven. The traded in properties were rented, repaired and sold or kept in inventory by Tallahassee Properties. After purchase of the traded-in properties, Respondent's expectations as a partner in Tallahassee Properties was that the partnership would take possession of the properties and manage them and make payments on existing mortgages associated with any of those properties. Respondent believes that until the latter part of 1985 when he and some of his operations were involved in a Chapter 11 Federal Bankruptcy declaration, payments on the existing mortgages for traded properties were being made, in that had it not been so that he would have been notified. The record offers no proof that can be relied upon to satisfactorily corroborate or rebut this assumption on his part. The Chapter 11 bankruptcy proceeding was not caused by problems associated with the traded properties. Ralco, Inc. was not involved in the bankruptcy. Some of the traded properties in question were owned by Ralco as grantee. Although Ralco was not involved in the bankruptcy, it was unable to make payments because of the bankruptcy in that the houses in question had a negative cash flow and Respondent was unable to take funds from the bankruptcy court and place them with Ralco, Inc. to make the payments on mortgages that existed on the traded properties. Collins Builders, Inc. and Collins and Associates, Inc. were not involved in the closings of the traded property. Their involvement was with the new house being purchased following the trade. The closing associated with the new house under purchase was a separate closing and Collins and Associates, Inc. received a real estate commission for its participation. None of the exact details of the solicitation process by Collins and Associates, Inc. in which homeowners were encouraged to trade existing residences on other homes built by Collins Builders, Inc. were made known, so that it might be understood whether Collins and Associates, Inc. promised to make the attempt to have the lender accept a substitute for the original mortgagor on the mortgage indebtedness, to include the possibility of the outright release of the original mortgages from the debt obligation. Therefore, that solicitation process has no part to play in examining the issue of Respondent's conduct associated with the closings of the traded homes. In the latter part of 1985, following the filing of the petition under Chapter 11, Bankruptcy Laws, Respondent and Duval First Corporation with which he was affiliated were granted an order of relief on December 23, 1985 in Case Nos. 85-07179B and 85-07178C, respectively in the United States District Court, Northern District of Florida, Tallahassee Division. As part of the disposition in front of the bankruptcy court, the bankrupt estates and Real Estate Financing, Inc. agreed that the bankruptcy estates would surrender certain properties and the automatic stay in all expressed injunctions associated with those properties were lifted. The bankruptcy court held that pursuant to 11 U.S.C. 506, Real Estate Financing, Inc. would not be entitled to an unsecured claim against the bankrupt estates for debts secured by the lien on those properties. Those properties had been encumbered by a first mortgage in favor for Real Estate Financing, Inc. The Court found that the value of those properties was equal to or exceeded the debts secured by the mortgage lien of Real Estate Financing, Inc. as of the date of the Order for Relief. In that Order for Relief, Real Estate Financing, Inc. was allowed a secured claim for the full extent of the debt due as of the date of the Order for Relief plus interest accrued up to the extent of the value of each property and up to the date of November 18, 1986. The bankruptcy court did not hold that Real Estate Financing, Inc. was entitled to any unsecured claim for any pre-petition debt that was secured by the lien on its mortgages. Among the properties affected by this action were those properties of David Walsh, Troy Brewer, Sam Hinson, Harold C. Miller, Peter Hartman, and John Miller, all of whom are listed as individuals whose transactions with Respondent are found in the Administrative Complaint and about which Respondent is said to have violated the aforementioned disciplinary provisions of Chapter 475, Florida Statutes. By this arrangement in bankruptcy court, Respondent hoped to avoid the circumstance by which the mortgage was foreclosed leaving a deficiency against the original mortgagor/homeowner of the traded-in property which would in turn lead to some claim against the bankruptcy estates for the amount of the deficiency. Nonetheless, Real Estate Financing, Inc. proceeded to foreclose on its mortgages as subsequently discussed in commenting on the individual counts to the Administrative Complaint pertaining to individual homeowners. While the bankrupt estates would have preferred to deed back the property in lieu of foreclosure, it accepted the foreclosures given the protections to the bankrupt estates that have been identified in this discussion. It should also be mentioned that two of the accounts in the Administrative Complaint pertaining to Eric Larsen and Robert Aubin, to be discussed, were not part of this arrangement in the bankruptcy court associated with Real Estate Financing, Inc. At the closings on the traded homes in question some explanations about the mortgage assumptions were made by persons who may have been representing Tallahassee Properties or other Collins affiliates, but these persons are not clearly identified in the record as to their actual position with those organizations and how Respondent was accountable for their remarks. Those remarks will be discussed in the assessment of the individual counts that follow. Respondent, following the petition for bankruptcy in his own name and that of companies with which he was associated, wrote to advise homeowners who had traded in their homes about his perception of the homeowners' status following that bankruptcy. These letters were written on February 18, 1986 on stationary of the Respondent and were signed by him. In this correspondence, which is the same format in all instances, he would make reference to the date upon which the transaction closed at which time the homeowner deeded over the traded property to Respondent or a company with which he was affiliated. He described the existence of the prior mortgage to Real Estate Financing, Inc. with a loan number and the existence of the paragraph 17, "due on sale" clause and, according to the letter, that the loan was not paid off at the time of the closing and the assertion that the lender would not allow the assumption of that loan by Respondent or one of his companies. Again this record is silent on the subject of what attitude the lender held about this, or even the matter of whether an attempt was made to have the lender accept a new obligor. He described how the lender was not considering Respondent or his company as purchaser but that the original mortgagor was being considered. This was taken to mean that Respondent was trying to express that the lender was looking to the original mortgagor as a responsible entity on the mortgage. The letter described how Respondent or one of his companies had been renting and making payments since the time of closing until December 23, 1985 when declaration of the Petition in bankruptcy went forward. It described how the Respondent and his companies were unable to continue funding payments related to the mortgages on the traded property which was in the name of the homeowners who had traded the property. The letter went on to describe how the payments would be brought current until February 28, 1986. The letter is interpreted to suggest that beyond that point, the property would either be deeded back to the original owner or the lender would foreclose. The letter expressed a preference by Respondent that because, interpreting the letter again, there was no cash flow that he preferred to see the property deeded back to the original owner. The name Bobbie May was given as a contact person and a telephone number provided for the homeowners to call regarding the return of the property back to the original homeowner. The letter goes on to describe an apology from Respondent to the homeowners. Movaline Hill who was a property manager for Tallahassee Properties traded in homes, to include the homes in discussion in the Administrative Complaint, offered her testimony at hearing. The principal business of Tallahassee Properties as established in her testimony was to rent homes. Ms. Hill advertised the property for rent, collected the rent, made payments on existing mortgages on the homes, and took care of maintenance matters. Tallahassee Properties took the rent and put the payments in escrow. One of the homes that Ms. Hill was involved with had belonged to David Walsh. It was a traded home and she had discussed with Walsh getting payment cards or coupons for the mortgage that existed on the traded home. The mortgage company had sent these cards or coupons to Walsh and Hill desired to have them so that the payments on the mortgage could be made. In this connection, Hill wrote Walsh a letter. A copy of that letter may be found as Petitioner's Exhibit 20. It indicates enclosure of a recorded deed on the traded property of Mr. Walsh showing Respondent as having the title in his name. It further states that Mr. Walsh should sign and mail a pre-prepared letter to Real Estate Financing, Inc. telling that lender to change the mailing address and requesting new payment cards. The letter describes that Real Estate Financing, Inc. did not know that the title was no longer in Mr. Walsh's name and that the lender would not transfer the mortgage to anyone and asks Walsh not to send the copy of the deed to the Respondent to the lender. Emphasis is placed in this correspondence on not sending that information to the lender. Ms. Hill was not instructed by anyone to write the letter. The reason why Ms. Hill said that she put an indication in the letter that the transfer of the mortgage could not be done was based upon her assertion that she had been told this by the lender. What connection Respondent had with the letter, if any, was not established. The cards that she received from Mr. Walsh on coupons for payments would have his name struck over and Respondent's name placed on it and Hill would send the check to the mortgage company for payment of the mortgage. With Real Estate Financing, Inc., Ms. Hill was sending one or two checks per month that dealt with 15 or 20 mortgages. There would be a lump sum payment with account numbers and backup materials sent with the check. The backup materials would include the payment cards or coupons. During Ms. Hill's tenure with the Tallahassee Properties, she says that she kept the mortgage payments current. No evidence was presented to the contrary which is competent. From this it is found that mortgage payments were kept current for a period of time which is not specifically shown. She received no contact from the mortgage companies on the topic of any assumption packages for these loans being assumed. She did receive some coupon books with the Respondent's name affixed. Those latter circumstances were not shown to be associated with any of the traded properties that are at issue in this case. Charles O. Middleton testified at the hearing. He had worked in 1981, 1982 and up to September, 1983, with Capitol Abstract and Title, Inc. which served as a closing agent on traded properties that were picked up by Tallahassee Properties. His recollection of the events is that, as closing agent for the title company, he worked from a contract which identified the terms of the transaction. His recollection is that the transactions associated with a trade property and the new home being purchased after trade was handled together. This is in contrast to the understanding of those homeowners whose traded properties are the subject of this Administrative Complaint and Respondent. The explanation by those homeowners and Respondent that two separate closings were held, one for the traded property and one for the newly purchased property is accepted as factually correct. Middleton recalls that explanations were given by him as closing agent concerning the nature of the transaction to include the matters of the paragraph 17 "due on sale" clause. He describes this arrangement as involving an affidavit or hold harmless agreement that had to be signed. This included the initialing of the paragraphs within that agreement by the buyer and the seller. Again, none of the homeowners who sold traded property that is described in the Administrative Complaint recalls such explanations and documents and their recollection is deemed more creditable and is accepted in lieu of the comments by Mr. Middleton. Likewise, the document for purposes of explanation which was offered as Respondent's Exhibit 8 containing disclaimers about the paragraph 17, "due on sale" clause, while admitted, offers no insight into the nature of what the homeowners were told in the cases that are at issue here because it isn't the same form that Middleton recalls using in the transactions he participated in as closing agent and hasn't been shown to be a form used in any of the cases here. Middleton explained that in the transactions he was involved in, the homeowners were provided a copy of every document to be utilized in the closing and that the original documents had their pages turned while the copies for the homeowners were being examined at the same time. A brief explanation would be given about each document and the homeowners were asked if they wished to take some time to read the documents and to ask any questions. Middleton as closing agent would offer to answer questions or put them in touch with the lender and let the lender answer questions. In Middleton's estimation, it was the closing agent's responsibility to make sure that necessary documents were presented to the lenders in the assumption of the mortgage for the traded in property. Respondent had not instructed Middleton in any of the closings on the topic of what to do with closing documents that were used at the time of transaction. Middleton said that he was unable to produce any of the documents of explanation concerning the closings which he participated in for Capital Abstract and Title, Inc. because he has no access to those files. Middleton identified the fact that in a circumstance in which a home had a mortgage and an assumption was called for, an assumption packet would be customarily ordered at the time of the request for assistance in the closing, which he refers to as an order. Middleton identifies the fact that he is only vaguely familiar with the transactions that are at issue in this Administrative Complaint. He thinks he may have closed some of them but he has no specific recollection about that. As a consequence, he has no worthwhile knowledge of how many of those transactions had assumption packages completed. COUNT I Samuel Hinson, Jr. owned property in Arbor Hills which he had bought from Collins Builders, Inc. on June 30, 1982. This house was taken in trade for a house on Starmount. This Starmount home was also purchased from Collins Builders, Inc. and Collins and Associates, Inc. served as the real estate firm for the purchase of the new home as agent for the seller. Andrew Jackson Federal Savings financed the new purchase. The traded in home was sold to Tallahassee Properties with Capital Abstract and Title, Inc., serving as closing agent according to documents presented at hearing. Mr. Middleton did not appear for Capital Abstract at that closing. In the purchaser's closing statement, W. Ronnie Collins is shown as the representative for Tallahassee Properties. Two warranty deeds were made from Hinson in selling his Arbor Hill property. In deeding his Arbor Hill property on May 20, 1983, one of those went to the Respondent and the other to Tallahassee Properties. In both warranty deeds, the grantee promised to assume and pay an existing mortgage in favor of Real Estate Financing, Inc. The existing mortgage on the Arbor Hills property had the paragraph 17 clause which absent certain exceptions allowed Real Estate Financing, Inc. at its option to declare all sums secured by the mortgage to be immediately due and payable, if the property was sold or transferred without prior written consent from the lender. None of the exceptions pertained to this transaction between Hinson and either Respondent or Tallahassee Properties. The paragraph 17 clause also stated that the mortgage holder was considered to have waived its option to accelerate if prior to the sale or transfer, the mortgage holder reached agreement with the purchaser in writing that the credit of the purchaser was satisfactory to the mortgage holder, thus allowing the purchaser to become responsible for the mortgage. In that instance, interest payable on the sum secured by the mortgage would be at the rate requested by the mortgage holder. The mortgagor, Hinson, would be released from all obligations under the mortgage note if the purchaser was substituted on prior written approval. Hinson went into the transactions involving the sale of his Arbor Hill house and the purchase of the Starmount house with the impression that he had to sell the Arbor Hill house in order to purchase the Starmount house. This was his surmise. Money realized in the sale of the Arbor Hill house was used as a down payment for the Starmount home. Petitioner believed that he had an arrangement to purchase the Starmount home with Ralph Collins. In reality, he was purchasing the home from Collins Builders, Inc. with Collins and Associates, Inc. being the seller's broker. In Mr. Hinson's mind, Respondent and Collins Brothers, Inc. and the then Collins real estate firm through Century 21 were all the same. Going into the transaction, Hinson was not familiar with Tallahassee Properties and its business purpose. Respondent was at both closings, the closing to sell the Arbor Hill house and the closing to purchase the Starmount home. No one discussed the matter of the assumption of the mortgage associated with the Arbor Hills house during the course of the closing of that home. Hinson got the impression from events that Respondent had bought his Arbor Hills house and that everything was being paid off. This impression was not based upon anything Respondent said to him. Hinson, after the closings, requested his insurance company to write to First Alabama concerning the cancellation of his homeowners policy on Arbor Hills. His understanding was that the insurance company sent a letter to do this and that First Alabama sent back a letter saying that they needed certain information. That latter correspondence was then taken to the Respondent. Respondent, under those circumstances, stated to Hinson that it was a mistake and that he would handle it, but that it would take some time to get some of the paper work done. Respondent did not comment to Mr. Hinson on that occasion that he had not assumed the mortgage for the Arbor Hill property nor did he indicate that none of the companies with which he was affiliated had assumed the mortgage. Respondent made no comment whatsoever about assumption of the mortgage in this conversation shown by facts presented at hearing. Hinson then got a new payment book from First Alabama, which he received a couple of days after the insurance letter. This was taken to Respondent and Respondent said that he would take care of it, that it was just a mistake. Again, what was meant by this remark was not developed at hearing. Hinson got one of the February 18, 1986 letters from Respondent that has been referred to previously. Having received this correspondence, Hinson complained to the Tallahassee Board of Realtors. Out of the process of his complaint, Hinson met with Keith Kinderman, Respondent's counsel and the Respondent together with Eric Hoffman, counsel to Hinson. Respondent told Hinson he would help get information and that his counsel, Mr. Kinderman would help in getting some form of restitution and help clear Hinson's name and seek relief from the Capital Abstract and Title, Inc. who had closed the Arbor Hill home. In attempting to obtain a Visa credit card and a Sears credit card, Hinson has been denied that credit. The reason given for the denial is the circumstance associated with the Arbor Hills home and non-payment of the mortgage. The exact circumstance of the Arbor Hills property, concerning who holds it now was not proven at hearing by evidence that can be relied upon for fact finding. COUNT II David P. Walsh and Leila DeJarnette Walsh, his wife bought a home in Huntington Woods from Collins Builders, Inc. on December 23, 1981. This home was financed through Real Estate Financing, Inc. and carried a mortgage from that lender. The mortgage included a paragraph 17 whose language was the same as the Hinson home financed by Real Estate Financing, Inc. The Walshes traded in the Huntington Woods property for a home on Faversham Drive which was financed by Citizens and Southern Mortgage Company. Separate closings were conducted. One was for the sale of the Huntington Woods property with Respondent receiving a warranty deed for that property which property was to be taken over by Tallahassee Properties. The second closing was associated with the sale of the Faversham Drive property from Collins Builders, Inc. to the Walshes. In executing the warranty deed in favor of Respondent as grantee pertaining to the Huntington Woods property, a condition of the warranty deed was an agreement by the grantee to assume the mortgage held by Real Estate Financing, Inc. and pay Capital Abstract and Title, Inc. through some person other than Middleton was the closing agent at the transaction involving the sale of the Huntington Woods property, according to documents at the hearing. Both that sale and the purchase of the Faversham Drive property took place on March 30, 1983. The Walshes signed a document reference the escrow account held by Real Estate Financing, Inc. on its Huntington Woods property. There is no indication whether this was or was not signed by Tallahassee Properties or the Respondent and sent to the Real Estate Financing, Inc. pertaining to funds in the escrow account and insurance coverage being transferred from the Walshes to Tallahassee Properties or Respondent as contemplated by the form. The separate closing associated with the Faversham Drive property was done through Tallahassee Title Company. Respondent was at the closing associated with the homes. Mr. Walsh is not in a position to pay for mortgages on two homes. Mr. Walsh's understanding of the trade in of his Huntington Woods home for the Faversham Drive home was to the effect that he could buy a new home from the transaction and that he would no longer be liable for the traded home, that all paperwork would be taken care of. Some salesman involved in these transactions made these remarks to Mr. Walsh; however, he doesn't know who that person was. Consequently, it is not possible to attribute responsibility for those remarks to Respondent. Subsequent to the closings, the Walshes received correspondence purportedly from First Alabama having to do with Real Estate Financing, Inc.'s mortgage held on the Huntington Woods' property. This correspondence of April 4, 1983, by its terms, reminds the Walshes that the mortgage holder has received notification of cancellation of the homeowner's policy and that the Walshes were to provide insurance coverage at all times. What the real circumstances of the homeowners policy was is not proven by competent evidence. In connection with the transactions, Mr. Walsh describes that he felt that he was dealing with a reputable real estate broker and that they had his best interest in mind. He was not represented by counsel at the closings. Mr. Walsh received one of the February 18, 1986 letters from Respondent as previously described. Mr. Walsh hired a lawyer to try to address the situation of the Huntington Woods property without success in the endeavor. To his knowledge the Huntington Woods property has been foreclosed on. No proof which is competent has been presented in the hearing to describe the exact nature of the developments with the property. Nonetheless, Mr. Walsh has had problems receiving credit twice since that time. Before the situation with the property he had never had credit problems. Mr. Walsh was proceeding in these transactions on the basis on the belief that Tallahassee Properties and the Respondent were the same entities. COUNT III Troy A. Brewer and Tina J. Brewer, his wife purchased a home from Collins Builders, Inc. in Huntington Woods on December 30, 1981. This home was financed by Real Estate Financing, Inc. A mortgage was given by the Brewers in favor of Real Estate Financing, Inc. and it included a paragraph 17 assumption clause as described in the Hinson mortgage financed by that lender. On March 25, 1983, the Brewers traded their Huntington Woods property for a home on Faringdon Drive. The seller of the Faringdon Drive property was Collins Builders, Inc. In these transactions, the Huntington Woods property was deeded to Respondent with the provisor in the warranty deed that Respondent would assume and agree to pay for the mortgage in favor of Real Estate Financing, Inc. Mr. Brewer is not in a position to meet mortgage payments associated with two mortgages; one on the Huntington Woods property and one on the Faringdon Drive property. Therefore, he would not knowingly obligate himself to assume mortgages associated with both of those properties. In the transactions associated with the traded property and new home purchased, Mr. Brewer proceeded on the basis that the first home was being taken over by the Respondent and that the mortgage would be paid off after a month or so as a means for him to purchase the second home. What led him to believe this is not clear. Mr. Brewer's recollection is that he was told that everything would be taken care of and he would not have to worry about anything and there wouldn't be any problems about the house being traded and that he could stay in the home that he was selling until the new home had been built and that once built, all transactions would be taken care of. Both the traded property and the property being purchased were financed by Real Estate Financing, Inc. He was not represented by an attorney in these matters. Some undisclosed realtor had told Mr. Brewer he could have an attorney but that he really didn't need one. As shown in the testimony of Mr. Brewer given at hearing, he had spoken to Respondent at closing. He also had conversations with Jackie Collins whom he believed to be a representative of Respondent. Jackie Collins was understood by Mr. Brewer to be a realtor. Again, the exact nature of the affiliation of Jackie Collins to the Respondent or his companies was not established in this hearing. Mr. Brewer did state that at the closing he was told by Respondent that there would be no problems. The nature of that remark was not further developed under interrogation of the witness. Nor was the matter of Mr. Brewer's comment to the effect that he had questioned the fact that his first mortgage on the Huntington Woods home was not assumable and had made that question known at the closing, other than to state that in response "they" had assured him everything would be taken care of and he wouldn't have to worry about it. This was associated with some remarks to the effect that Mr. Brewer should not worry that "we" would take it all in and that "they" would transfer everything over and take it out of the Brewers' name, again not pursued as to who "they" and "we" were and whether Respondent was a "they" or "we" or was in attendance when a "they" or "we" made the comments if he was not a "they" or "we." On this subject, Mr. Brewer was of the understanding that the transfer of the mortgage from Mr. Brewer to Respondent had in fact been tentatively approved by Real Estate Financing, Inc. but this was not proven by competent proof either. Mr. Brewer received one of the February 8, 1986 letters from Respondent as previously described. He in turn composed a letter of complaint concerning the transactions associated with the traded property. The complaint is dated March 31, 1986 and is addressed "To whom it may concern". As a result of the non-payment of the Huntington Woods property, Mr. Brewer received a letter purportedly from First Alabama for Real Estate Financing, Inc. dated February 13, 1986 that indicated that payment for the mortgage in the Brewer property had not been paid in January and February, 1986 and under paragraph 18 of the mortgage, Mr. Brewer was being notified of the failure to make payments and the possibility of the pursuit of these delinquent payments through legal means. Whether the assertions in this unauthenticated hearsay document are true was not proven by competent evidence. Beyond that date, in an action in which Respondent and the Brewers were named as defendants, Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. obtained a Summary Final Judgment of foreclosure on the Huntington Woods property on June 1, 1988. This points out that the Brewers were not released from the mortgage obligation as envisioned by paragraph 17. It does not address what attempts were made by Respondent or his companies to gain their release. As a result of the foreclosure, Mr. Brewer has had problems with his credit. Notwithstanding the foreclosure on the Huntington Woods property, there has been no deficiency judgment entered against Mr. Brewer, to his knowledge. COUNT V On November 30, 1983, Collins Company of Pensacola, Inc. conveyed property at Eldorado Drive in Pensacola, Florida to Harold C. Miller, Jr., a Collins employee. That property was subject to a mortgage from Real Estate Financing, Inc. which included a paragraph 17 as included in the facts pertaining to the Hinson transaction involving that lender. This house was purchased because of a transfer of Mr. Miller to Pensacola as a condition of his employment with the Collins Company. The Collins Company of Pensacola was responsible for paying the mortgages during that time frame. In conversation with Respondent, it was determined that Miller would buy the house and the Respondent would buy it back and in the interim, Mr. Miller would live rent free. On May 23, 1985, a quit claim deed was executed by Mr. Miller in favor of the Respondent returning possession of the Pensacola home. Because Respondent had told Mr. Miller that Respondent would make payments on this home, Mr. Miller did not make any payments. Mr. Miller speaks of a contract that was in writing and was involved in the closing on the Pensacola home when it was purchased and that there was a promise to assume the mortgage held by Real Estate Finance, Inc. This comment is made in a deposition of Mr. Miller which was entered as Exhibit 71 by the Petitioner. Whether this refers to an assumption by the Respondent or someone else is not clear. As pointed out by the deposition testimony, more importantly, this contract was not produced then and is not available now for consideration in the deliberation of this case. Mr. Miller bought another house from Collins Construction in Leon County which is at Foxcroft. At the time of the deposition it was occupied by Susan, Mr. Miller's wife. Real Estate Financing, Inc. sued the Respondent and Harold C. Miller, Jr. and Susan F. Miller, his wife, in a foreclosure associated with the Pensacola property and received a Final Judgement for foreclosure on May 11, 1988. This points out that the Millers were not released from the mortgage obligation. By the circumstances, Mr. Miller was persuaded that the Respondent would take care of the mortgage on the Pensacola home until it was paid off. What the payment history was on the mortgage prior to foreclosure has not been established in this record. In terms of any promises from Respondent about further obligations on the mortgage on the Pensacola home, Mr. Miller describes that Respondent never told him that he was relieved of that obligation or that he wasn't. Mr. Miller did not question the Respondent about this because he trusted him. COUNT VI On September 25, 1981, Collins Builders, Inc. sold a home to Peter A. Hartmann at Grantham Lane in Tallahassee, Florida. Mr. Hartmann borrowed money from Real Estate Financing, Inc. to purchase that home secured by a mortgage that included paragraph 17 the language of which is the same as in the Hinson transaction with Real Estate Financing, Inc. That property was subsequently deeded to Respondent on March 25, 1983. In the deed Respondent as grantee promises to assume and pay the Real Estate Financing, Inc. mortgage on the property. The Hartmann property upon which Real Estate Financing, Inc. held a mortgage was foreclosed upon in a suit by Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. against Respondent and in Peter A. Hartmann. Action was taken by order of court on May 3, 1988 and the property sold on May 27, 1988 as evidenced by a Certificate of Sale from the Clerk of the Circuit Court, Second Judicial Court in and for Leon County, Florida. This points out that Mr. Hartmann was not released form the mortgage obligation. There is a potential for a deficiency judgement against Mr. Hartmann following that sale. The details of the Hartmann transaction were not presented at hearing through his testimony or anyone else. COUNT VII On April 22, 1982, Collins Builders, Inc., sold John A. Miller and Jeanne B. Miller, his wife, a home in Lakewood Estates. That home was secured by a mortgage in favor of Real Estate Financing, Inc. It contained a paragraph 17 which had the language set out in the Hinson transaction with Real Estate Financing, Inc. which has been described. The home at Lakewood Estates was traded for a home in Huntington Woods II. Those transactions took place on March 2, 1984, and on that date the Millers executed a deed to Ralco, Inc., one of Respondent's companies. The warranty deed contained language to the effect that Ralco, Inc. promised to pay on the mortgage held by Real Estate Financing, Inc. Bobbie G. May signed the contract for sales and purchase as representative of Ralco, Inc. The Huntington Woods II property that was bought by the Millers was bought from Collins Builders, Inc. with Bobbie G. May serving as representative for Collins Builders, Inc. in the contract for sale and purchase. The payments were not made as promised by Ralco, Inc. and Respondent sent the Millers one of the February 18, 1986 letters as previously described. Ultimately, Florida National Mortgage Association through Real Estate Financing, Inc. sued Ralco, Inc. and the Millers in foreclosure and obtained a summary Final Judgement of Foreclosure against those defendants. This points out that the Millers were not released from the mortgage obligation. This as with other foreclosures does not speak to attempts by Ralco, Inc. to be allowed to assume the mortgages in a novation. The property at Lakewood Estates which had been traded in was then sold June 28, 1988, as evidenced by a Certificate of Sale from the Clerk of the Circuit Court of the Second Judicial Circuit, in and for Leon County, Florida. That judgment against the Millers is shown on the credit report of John Henry Miller. Mrs. Miller understood that the mortgage payments on the traded home would be made until the property was sold by Ralco, Inc. Visits to the neighborhood where that traded home was found did not indicate any activities toward the sale by way of for sale signs. No one was living in the traded home at that time. The Millers were not represented by counsel during the course of the closings associated with the two homes. They were represented in the foreclosures suit. In reference to the credit circumstance of the Millers, in trying to buy a vehicle they had been denied credit once. They were eventually able to buy the vehicle. The Millers had been told when purchasing the initial home at Lakewood Estates that the reason for buying it would be the possibility of being able to trade for a larger home at some later date if needed. Again, it is not clear who made those statements to the Millers. On the day before the closing of the traded home, Mrs. Miller spoke with Sissie Collins whom she understood to be affiliated with Respondent or one of his companies. The record does not show what that affiliation would have been, if anything. In this conversation with Sissie Collins, Mrs. Miller pointed out to Ms. Collins that the loan with Real Estate Financing, Inc. was not assumable without qualifying. Moreover, Mrs. Miller believed that Respondent did not qualify for the loan and that it was not assumable unless he did. Sissie Collins stated that this was not a problem and that Real Estate Financing, Inc. or First Alabama allowed Respondent to assume a mortgage and make the payments until the property was sold and the mortgage was paid off and that Real Estate Financing, Inc. was fully aware of the circumstance. Whether this was true or not was not proven by competent evidence. What Respondent knew about these matters wasn't shown either. At the time of hearing, the Millers had not been called upon to pay any deficiencies associated with the foreclosure of their Lakewood Estates property. COUNT VIII Eric R. Larsen and Young Oak Larsen, his wife, purchased a home from a Collins Company in Huntington Woods Unit II. That house was eventually traded for a home in Cross Creek. The traded home was deeded to Respondent with the promise that Respondent would assume an existing mortgage on the Huntington Woods Unit II property which is owed to Andrew Jackson State Savings and Loan Association and make payments. The closing associated with the traded property took place on December 2, 1982. The new home was being purchased through the same lending institution as the traded home. The Larsens were not represented in the closings associated with the traded home and the purchased home. The closing of the traded home took place in offices of the Respondent's business. The second closing for the purchased home took place at the Andrew Jackson Federal Savings. When Mr. Larsen asked why the deed for his Huntington Woods II property was being made to the Respondent, he was told that it was to facilitate the assumption of the mortgage. By his remarks, Mr. Larsen is not clear on whether the Respondent attended the closing associated with the traded property. He does recall someone whose name is Chip who he thought was the real estate broker who worked with Respondent was at the closing. No further indication of who this man named Chip might be as to association with Respondent or his companies was shown in this record. The Larsens received a February 18, 1986 letter from Respondent as previously described, when the problems occurred about payments for the traded property, and at that time the mortgage was shown as being held by Colonial Mortgage Company. Mr. Larsen also received a letter on April 8, 1987, purportedly from Colonial Mortgage Company, which states that Mr. Larsen is not released from liability on the traded property and some comment about assumption packages having been sent on various dates and reminds Mr. Larsen that the loan could not be assumed without the prospective purchaser's credit having been approved. The letter describes other perceptions about the ability of the Respondent to take over responsibility for the mortgage on the traded property. All of the matters set out in this unauthenticated correspondence are hearsay and they cannot form the basis of fact-finding in terms of whether Respondent or his companies were ever allowed to assume the mortgage on the traded property. People who had a direct knowledge of the mortgage circumstance with Colonial Mortgage Company pertaining to this traded property as with other traded property on which a lender held mortgages and sent letters have not been presented to explain that circumstance by competent evidence. Likewise, the outcome of what has happened with the traded property in the Larsen transaction has not been proven by competent evidence. The explanation of the outcome with that property is hearsay which may not be used as a basis for fact finding. COUNT IX Robert R. and Patricia A. Aubin, husband and wife, traded property under the program which Respondent was affiliated with for taking in one residence and selling another. Mr. Aubin thought that this kind of transaction was common and that led to his telling his financing institution that the same builder was taking back the original home in order to build Mr. Aubin another house, thinking that this might simplify the transaction. In speaking to someone about the obligation to deal with the existing mortgage on the traded property, he identifies the person he was talking to as Ed Hines. Again, it is not clear what Mr. Hines' association was with the Respondent and his companies. The traded home was going to be given to Tallahassee Properties. Mr. Aubin was not certain of the arrangement Respondent had with his individual companies. Ultimately, there was a problem with the payments on the house that had been traded in. Respondent wrote the Aubins one of the February 18, 1986 letters reference the property at Huntington Woods Unit I. An arrangement was being made whereby Real Estate Financing, Inc. received $3,704.48 from Ralco, Inc. by a check of June 26, 1986. That check was issued after Ralco, Inc. conveyed the traded property back to the Aubins on June 17, 1986 and this resolved the problem for the Aubins.
Recommendation In consideration of the facts found and the conclusions of law reached, it RECOMMENDED: That a Final Order be entered which dismisses the Administrative Complaint. DONE and ENTERED this 20th day of October, 1989, at Tallahassee, Florida. CHARLES C. ADAMS, 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 October, 1989. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-3850 The following discussion is given concerning the proposed fact-finding offered by the parties. PETITIONER'S FACTS Paragraph 1 is utilized. Paragraph 2 is not necessary to the resolution of the dispute. Paragraph 3 is not necessary to the resolution of the dispute. 4-5. Paragraphs 4 and 5 are set out in the findings of fact. 6-10. Paragraphs 6-10 are subordinate to facts found. Paragraph 11 has not been proven. Paragraph 12 is correct in terms of Hinson's decision to convey the property; however, what Hinson was allowed to believe concerning the matter of assumption as it might show culpability on the part of the Respondent has not been proven. This matter set forth in paragraph 13 has not been proven. Paragraph 14 is not necessary to the resolution of the dispute. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 has not been proven as to any financial losses due to dishonest acts or false promises of the Respondent. Hinson was found to have been denied credit cards. The latter sentence in paragraph 16 is speculation and not fact. Paragraph 17 is subordinate to facts found. Paragraph 18 in the suggestion that the Respondent through his real estate office and salesmen made representations and promises to the Walshes was not proven in the sense that persons involved with the Walshes and the transaction to trade in the home were not sufficiently identified to understand how those persons were affiliated with the Respondent. Paragraph 19 is accepted as to the documents and promises by the Respondent. Again, what the association was of the other person identified as the salesman may have been is not clear in this transaction. Paragraph 20 is subordinate to facts found. Paragraph 21 is subordinate to facts found. Paragraph 22 is not proven in the first sentence. The second sentence is subordinate to facts found. Paragraph 23 was not proven. Paragraph 24 is subordinate to facts found. Paragraph 25 is subordinate to facts found except in its suggestion that the Walshes had been deceived in the sense of the idea of the mortgage not having been assumed or attempts made to have it assumed. Paragraph 26 is contrary to facts found. Paragraph 27 is subordinate to facts found. Paragraph 28 is subordinate to facts found except as it identifies the nature of the salesperson and what the affiliation was with Collins and Associates insufficient proof was made to show the true nature of the position of the salesperson in Collins and Associates, Inc., if any, and what Respondent had in mind and any instructions to this person who was reportedly the salesperson. Paragraph 29 is subordinate to facts found as to promises in the document system responsibilities of Respondent. Otherwise it is not accepted. Paragraph 30 is subordinate to facts found except as to its suggestion that deceit has been proven relating to the Respondent's attempts to have the mortgage assumed. Paragraph 31 is subordinate to facts found. Paragraph 32 is subordinate to facts found. Paragraph 33 is subordinate to facts found. Paragraph 34 is subordinate to facts found except as to the suggestion that this problem of the foreclosure dissolved the marriage. Paragraph 35 in its first sentence is contrary to the Impression of the facts. There was a discussion and a decision reached to buy the house, whether Respondent was acting as a real estate broker individually or as a builder developer is unclear. Whether he made his employee buy the house or directed him to is not accepted as a fact. Paragraph 36 is subordinate to facts found. Paragraph 37 is subordinate to facts found. Paragraph 38 was not proven on the issue of whether Respondent applied for an assumption. The Final Judgment of closure was proven. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found in a suggestion of an agreement to take over the Huntington Woods property. Reference to the allegations and the foreclosure petition are not necessary to the resolution of the dispute and do not constitute an explanation of how Respondent may have carried out his promise to take over responsibilities for the mortgage and the traded property which is the true issue. Likewise, paragraph 42 where it is acknowledged in that suit the agreement to assume the mortgage does not answer the issue of whether attempts were made to bring about that assumption. Paragraph 43 is subordinate to facts found. Paragraph 44 and its suggestion as to any intended action on the part of a mortgage insurer has not been proven by competent evidence. Paragraph 45 is subordinate to facts found. Paragraph 46 is subordinate to facts found. Paragraph 47 in the suggestion of activities by a salesperson of Collins and Associates has not been shown in terms of the affiliation with the Respondent's companies or with the Respondent in terms of the details of that affiliation sufficient to show that Respondent is culpable for any acts of his employees. Respondent through Ralco, Inc. had agreed to assume and pay for the existing mortgage on the traded property. Paragraph 48 is subordinate to facts found. Paragraph 49 is subordinate to facts found. Suggestion by counsel that Respondent's admission of 86 coincide with the fact finding in paragraph 50 is erroneous as is reference to page 11 in the transcript which speaks of the admissions. Paragraph 51 is subordinate to the facts found. Paragraph 52 is subordinate to the facts found with the exception that the Respondent was not shown to have been deceitful in saying that the mortgage had not been allowed for assumption in that no competent proof was offered as to the attitude of the lender concerning the assumption. Paragraph 53 is subordinate to the facts found. Paragraph 54 is correct in terms of the credit report on foreclosure, otherwise it is rejected as heresay. Paragraph 55 is inaccurate when it suggests that proof was made that Respondent did not take care of the assumption in the Larsen trade-in property. Paragraph 56 is subordinate to the facts found. Paragraph 57 constitutes legal argument. RESPONDENT'S FACTS 1-7. Paragraphs 1-7 are subordinate to facts found. The first sentence of Paragraph 8 is contrary to facts found. The remaining sentences within paragraph 8 are subordinate to facts found. Paragraph 9 is subordinate to facts found. In paragraph 10, Charles Middleton was not shown to have been the closing agent for Capital Abstract and Title, Inc. in the transactions which are at issue here. In paragraph 11, Respondent was responsible for applying for the mortgage assumptions but the proof was not made that he did not do so or that he did. Paragraph 12 is subordinate to the facts found. Paragraph 13 is subordinate to the facts found. Paragraph 14 is hearsay and may not form the basis of the fact finding. Paragraph 15 is hearsay and may not form the basis of the fact finding. Paragraph 16 is subordinate to the facts found. Paragraph 17 is subordinate to the facts found. Paragraph 18 is subordinate to the facts found. Paragraph 19 is subordinate to the fact found. Paragraph 20 is not accepted. Paragraph 21 is not accepted. Paragraph 22 is subordinate to the facts found. Paragraph 23 is not relevant. Paragraph 24 is the reputation of the Respondent is only relevant if culpability has been shown. It has not been. 25. Paragraph 25 is subordinate to facts found. Paragraph 26 is not accepted in terms of what position Chip Miller held and what capacity he was acting in when involved in the Hinson transaction as employee of Collins and Associates, or Tallahassee Properties or exactly what capacity. Paragraph 27 is subordinate to the facts found. Paragraph 28 is subordinate to the fact found. Paragraph 29 is heresay and not accepted. Paragraph 30 is contrary to the impression of the credit circumstance of Mr. Hinson. Whatever the current credit report may say, Mr. Hinson's credit had been hurt. Paragraph 31 is true. Paragraph 32 is subordinate to the facts found except for deprivation of credit. Paragraph 33 is not necessary to the resolution of dispute. Paragraph 34 is subordinate to facts found. Paragraph 35 is subordinate to facts found. Paragraph 36 is contrary to facts found. Paragraph 37 is contrary to facts found. Paragraph 38 is subordinate to facts found. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found, except as to credit. Paragraph 42 is subordinate to facts found. Paragraph 43 is subordinate to facts found, except in its suggestion of what capacity Sissie Collins really served which is not established. Paragraph 44 is subordinate to facts found, except not proven that mortgage assumption tentatively approved. He did make representations as the mortgage grantee. Paragraph 46 is subordinate to the fact found. Paragraph 47 is subordinate to the facts found. Paragraph 48 is contrary to facts found. There is no paragraph 49. Paragraph 50 is subordinate to the facts found. Paragraph 51 is subordinate to the facts found, except as to credit. Paragraph 52 is subordinate to the facts found. 53.-55. Paragraphs 53-55 are subordinate to the facts found. Paragraph 56 is contrary to facts found. Paragraph 57 is subordinate. Paragraph 58 is not necessary to the resolution of the dispute. Paragraph 59 is subordinate to the facts found. 60.-62 Paragraphs 60-62 are subordinate to the facts found. 63.-64. Paragraphs 63-64 are subordinate to the facts found. Paragraph 65 is subordinate to facts found. Paragraph 66 is subordinate to the facts found. Paragraph 67 is subordinate to the facts found. Paragraph 68 is subordinate to the facts found. Paragraph 69 is subordinate to the facts found. Paragraph 70 is subordinate to the facts found. 71.-72. Paragraphs 71-72 are subordinate to the facts found. Paragraph 73 in the first sentence is subordinate to the facts found. The second sentence has to do with whether Andrew Jackson gave preliminary approval for the assumption of the mortgage on the traded property and is heresay not accepted. Paragraph 74 is not necessary to the resolution of the dispute. Paragraph 75 is subordinate to the facts found. 76.-77. Paragraphs 76 and 77 are accepted as true but are not needed. 78.-79. Paragraphs 78-79 are subordinate to the facts found. 80. In this instance and all that have discussed before, Respondent did make representations through the February 18, 1986 letters. 81-82. Paragraphs 81-82 are subordinate to facts found. 83. Paragraph 83 is subordinate to facts found. 84.-85. Paragraphs 84-85 are subordinate to facts found. Suggestion that the paragraph 86 relates back to initial paragraphs is acknowledged and accepted in the manner that has been described in the discussion at the paragraphs set forth in the proposed fact finding. Paragraph 87 is legal argument. COPIES FURNISHED: Darlene F. Keller, Executive Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 James H. Gillis, Esquire DPR-Division of Real Estate Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32817 William M. Furlow, Esquire Katz, Kutter, Haigler, Alderman, Eaton, Davis, Marks, P.A. Post Office Box 1877 Tallahassee, Florida 32302-1877 Keith Kinderman, Esquire 906 Thomasville Road Tallahassee, Florida 32303 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
Findings Of Fact Talbott and Drake, Inc. is and was at all times alleged herein a registered real estate broker corporation. William F. Talbott is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. Paul P. Drake is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. Helen C. Drake is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. On or about January 18, 1977, William F. Talbott, on behalf of Talbott and Drake, Inc., negotiated a contract for sale and purchase between the High Ridge Water Company -- John H. McGeary, Jr., sellers, and William Montaltos and Genevieve L. Montaltos, his wife, buyers, for the purchase of lot in a new housing area known as River Forest in the Boca Raton area, Palm Beach County. A copy of said contract, Petitioner's Exhibit 1, is received into the record pursuant to the Stipulation of the parties. Said contract, Petitioner's Exhibit 1, was subject to the declarations of restrictions filed by High Ridge Water Company as seller on June 28, 1976, wherein, in Paragraph 7, the developer retained the right to approve or disapprove the plans and specifications for the construction of any structure, building, fence, wall or sign in the River Forest area. A copy of said declarations of restrictions is received into the record as Petitioner's Exhibit 2, pursuant to the Stipulation of the parties. As a part of the restrictions and provisions of the contract, the purchasers, Mr. and Mrs. Montaltos, were required to use a builder selected from a list of designated builders, approved and designated by Talbott and Drake, Inc. and the High Ridge Water Company. Mr. and Mrs. Montaltos decided to build on the subject property and contacted numerous builders designated by Talbott and Drake, Inc. to submit the bids for the construction of a home on the property. On or about June 9, 1976, the McGeary partnership, as developer of the River Forest area, entered into a joint venture agreement with Group Six Developers Collaborative, Inc., whereby Group Six Developers Collaborative, Inc. purchased lots in the River Forest area and agreed to pay Talbott and Drake, Inc. a five-percent commission on all homes constructed on said lots by Group Six Developers Collaborative, Inc. in the River Forest area. A copy of said joint venture agreement is received into the record as Petitioner's Exhibit 3 pursuant to the Stipulation of the parties. Petitioner's Exhibit 3 recites on the first page of said agreement as follows: WITNESSETH: WHEREAS, by that certain Purchase Agreement intended to be executed this date, BUILDER (Group Six Collaborative, Inc.) is agreeing to purchase certain real property as set forth herein, a copy of which Purchase Agreement is attached hereto as Exhibit 1; . . . (emphasis added) WHEREAS, the parties hereto are desirous of forming a joint venture for the purpose of finan- cing, constructing and selling single family residences upon the property described in Exhibit 1; NOW THEREFORE, in consideration of the pro- mises and of the mutual covenants of the parties hereto, and for other good and valuable considera- tion, the parties agree as follows: 9. BROKER. The parties agree that TALBOTT AND DRAKE, INC., a Florida real estate brokerage corporation, shall have an exclusive listing agree- ment with BUILDER, as owner and joint venturer, for the sale of residences to be constructed pursuant to this Agreement, a copy of which Agreement is attached hereto as Exhibit 2. As a commission for their services, which shall include but not be limited to, advertising, manning model houses, showing receiving of deposits, qualifying prospects, assisting in obtaining financing for purchasers, they shall receive five percent (5 percent) of the pur- chase price, according to the provisions contained in Exhibit 2. The joint venture agreement, Petitioner's Exhibit 3, is clearly limited to houses to be constructed on the lots purchased from the McGeary partnership. The agreement does not constitute an agreement to pay Talbott and Drake, Inc. a fee of five percent of the construction cost of any custom home built by one of the designated builders on a lot purchased by an individual. When Mr. and Mrs. Montaltos received the bid statement from Group Six Developers Collaborative, Inc. there was noted thereon: "Add Real Estate Commission as per Talbott and Drake contract." A copy of said bid statement is received into the record as Petitioner's Exhibit 4 pursuant to the Stipulation of the parties. Although Mr. and Mrs. Montaltos were informed that Talbott and Drake, Inc. was to be paid a ten-percent commission by the seller on the sale of the property to Mr. and Mrs. Montaltos, they were at no time informed directly by the Respondents that the builders on the "approved list" were required to pay a five-percent commission to Talbott and Drake, Inc., nor that the said five- percent commission would be passed on to Mr. and Mrs. Montaltos when they contracted with an "approved" builder to construct a home on the subject property. On or about February 4, 1977, William F. Talbott, on behalf of Talbott and Drake, Inc., negotiated the contract for sale and purchase between High Ridge Water Company, as seller, and Donald James Kostuch and Mary Louise Kostuch, his wife, buyers, for purchase of a lot in the River Forest area of Palm Beach County. A copy of said contract is received into the record as Petitioner's Exhibit 5 pursuant to the Stipulation of the parties. Mr. and Mrs. Kostuch were required by the contract to select a builder from an approved list of designated builders approved and supplied by Talbott and Drake, Inc. and seller, High Ridge Water Company. Mr. and Mrs. Kostuch selected Snow Realty and Construction, Inc. from the list supplied by Talbott and Drake, Inc. Snow Realty and Construction, Inc. had an agreement with the McGeary partnership and Talbott and Drake, Inc. similar to that outlined in the joint venture agreement between the McGeary partnership in Group Six Developers Collaborative, Inc., Petitioner's Exhibit 3, whereby Snow Realty and Construction, Inc. agreed to pay Talbott and Drake, Inc. a five-percent commission on any residence that Snow Realty and Construction, Inc. built in the River Forest area. The bid supplied by Snow Realty and Construction, Inc. on March 7, 1977, to Talbott and Drake, Inc. contained a listing of real estate commission to Talbott and Drake, Inc. in the amount of $3,652. A copy of said bid statement is received into the record as Petitioner's Exhibit 6 pursuant to the Stipulation of the parties. The Kostuchs were advised of a five-percent fee to be paid by the builder by a salesman working for another broker who first introduced the Kostuchs to the real property in River Forest. The salesman advised the Kostuchs prior to their entry into the contract for the purchase of the lot in River Forest in which they agreed to limit their choice of builder to one approved by the McGeary partnership and Talbott and Drake, Inc. This disclosure would be sufficient to comply with the provisions of Rule 21V-10.13, Florida Administrative Code, because the fee was revealed by a salesperson involved in the transaction prior to the execution of the contract under which the favor, if any, was granted. Talbott and Drake, Inc., in addition to performing services as listing agent for the sale of homes in River Forest, also functioned as the prime developer in this project pursuant to an agreement with High Ridge Water Company and the McGeary partnership. Regarding the Montaltos' transaction, the limitation of the owners to the use of one of the approved builders constitutes the granting or placement of favor, because it narrows the competition to one of five builders out of all the builders available in the Fort Lauderdale area. The affidavits introduced indicate that, notwithstanding the absence of a written agreement, the designated builders had agreed to pay to Talbott and Drake, Inc. a fee of five percent of the cost of construction of any custom home as compensation for the efforts of Talbott and Drake, Inc. in developing the property. While compensation for these services is reasonable, it still constitutes a fee to be paid Talbott and Drake, Inc. from one of the five designated builders who would benefit from the contract. The potential adverse effect of this arrangement was to transfer a cost generally allocated to the cost of the lot to the cost of the house. Therefore, people shopping for a lot could be misled in the comparison of similar lots in different subdivisions in the absence of being advised of the fee to be paid by the builders to Talbott and Drake, Inc. However, the evidence shows no attempt to keep this fee a secret and thereby mislead buyers. The existence of such a fee is referred to in sales literature prepared by Talbott and Drake, Inc. The Kostuchs were advised of the fee by a participating salesman for another real estate company. The builders set out the fee as a separate cost item as opposed to absorbing it in general costs within their bids. While the Respondents could not produce evidence that the Montaltos' had been advised of the existence of the fee, and the Montaltos' testified that they had not been advised, this appears to be an isolated incident as opposed to a course of conduct. Notwithstanding proof of the above, no evidence is presented that the Montaltos' contracted with a designated builder to build their house, and that a designated builder paid a fee to Talbott and Drake, Inc. To the contrary, the testimony of William Talbott was that the Montaltos' had breached the terms of their contract regarding the use of a designated builder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the Florida Real Estate Commission issue a letter of reprimand to Talbott and Drake, Inc. which, in fairness to the Respondents, should set out the specifics of the violation and to further apprise other registrants of the potential dangers of such fee arrangement. DONE and ORDERED this 4th day of June, 1979, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Charles M. Holcomb, Esquire 653 Brevard Avenue Post Office Box 1657 Cocoa, Florida 32922
The Issue The issue in this case is whether Petitioner, a licensed Florida real estate sales associate, violated provisions of Subsections 475.25(1)(b), 475.25(1)(d)1., 475.25(1)(e), 475.42(1)(b), and 475.42(1)(d), Florida Statutes (2007),1 and, if so, what discipline should be imposed.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate (the Department), is the state agency responsible for licensing and monitoring real estate sales associates within the state. It is charged also with the duty to prosecute administrative complaints for violations of the law by real estate sales associates. Respondent, Caroline Mohan (Ms. Mohan), is a licensed real estate sales associate who holds License No. 3087231. She was registered as a sales associate with Coral Shores Realty (Coral Shores) in Fort Lauderdale, Florida, from September 12, 2005, to March 28, 2008. At all times relevant to the charges against her, Ms. Mohan was the Coral Shores sales associate who was the listing agent for Anthony Mannarino, the seller of property located at 10530 Versailles Boulevard, Wellington, Florida (the "subject property"). At closing, Coral Shores was to have received at 2.5 percent commission and pay a portion of the commission to Ms. Mohan. Dawn Campbell and Garth Smith (the buyers) entered into a Residential Sale and Purchase Contract (the Contract) to purchase the subject property from Mr. Mannarino. Pursuant to the contract, the buyers were to deposit $10,000 in an escrow account in two $5,000 installments. The Contract was signed on or about March 12, 2007. The transactions took place electronically and Mr. Smith sent Ms. Mohan a photocopy of a $5,000 check that he was supposed to have deposited, under the terms of the contract, in the account of Closings Unlimited Title Company (Closings Unlimited), but he never sent the check to Closings Unlimited. The seller asked Ms. Mohan to have the buyer use a different escrow agent, Southeast Land Title (Southeast), and so the buyer wired $5,000.00 to Southeast, but the Contract was not amended to reflect the name of the new escrow agent. A $5,000 deposit was sent to Southeast by the buyers, but they never paid the $5,000 balance due on the deposit. Mr. Smith testified the he could not make the second payment because he gave $5,000 in cash to an employee to deposit in his account so that he could make a wire transfer, but the employee took the money. On April 3, 2007, Southeast faxed a notice to Coral Shores, with an attached letter to the buyers, informing them of its intention to respond to a demand (presumably by the seller) to release the $5,000 held in escrow related to the subject property. As a result of a complaint filed by Dorothy Hoyt, a representative of Southeast, the matter was investigated and an Administrative Complaint filed against Respondent. The Administrative Complaint alleges that Ms. Mohan personally received funds, fraudulently failed to account for those funds, and acted, without the proper license, as a broker by accepting the deposit. The Department's investigator testified that he was never able to determine if the escrow deposit was deposited at any bank, lending institution or with Dorothy Hoyt of Southeast Land Title of Boca Raton. He "believe[s] there was a wire for one deposit made, but [he] did not receive confirmation of that." Regarding his conversations with Ms. Hoyt, the investigator reported "she did state that . . . she had received - eventually received $5,000.00 and was still waiting [for] another $5,000.00 in order to have the full $10,000.00 deposit." In his report, the Department's investigator claimed that Respondent was terminated from employment by her Coral Shores broker, Ronald Cika, as a result of her misconduct in handling transactions related to the subject property. That claim was contradicted by Mr. Cika and by Ms. Mohan. Their testimony was supported by the contents of e-mails between his office and Respondent that show that she became inactive as a realtor while traveling overseas with an offer to reactivate with the same broker upon her return. Mr. Cika testified that he is aware of a lawsuit filed by Dawn Campbell related to a different address on the same street, 10526 Versailles Boulevard, but that he is not aware of any issues related to 10530 Versailles Boulevard, the subject property. Jannet Rodriguez, owner of Closings Unlimited, testified that she was never contacted and never opened a file to serve as either an escrow or closing agent for the subject property at 10530 Versailles Boulevard. She, too, is involved only in issues related to 10526 Versailles Boulevard.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate, dismissing the complaint against Respondent, Caroline Mohan. DONE AND ENTERED this 12th day of June, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 12th day of June, 2009.
Findings Of Fact At all times referred to in these findings of fact, Carlson was a licensed real estate salesman having been issued License Number 0187184. The last license issued was as a salesman, c/o Pauls Real Estate and Investments, Inc., 441 East Shore Drive, Clearwater Beach, Florida 33515. From October 13, 1982, to June 28, 1983, Carlson was licensed as a real estate salesman in the employ of corporate real estate broker Alliance Real Estate, Inc. of which Nicholas G. Mastro was a qualifying broker and officer. During her employment, Carlson was employed to solicit and obtain landlords and tenants in connection with the rental property management brokerage business of Alliance Real Estate, Inc. Carlson worked out of Alliance's Clearwater Beach office, ten miles from the main office on Gulf-to-Bay Boulevard, Clearwater. Generally, Alliance's official policy was that the originals of property listings, property management agreements and rental agreements were to be maintained at the main office, with work copies filed at the Beach office. Correspondence and miscellaneous property management papers, such as invoices, frequently are maintained exclusively at the Beach office. Funds were to be deposited into, and checks were to be written out of, Alliance's operating account by Alliance's staff at the main office. However, due to the distance between the main office and the Beach office, it was inefficient and inconvenient for Carlson to follow the official policies and procedures. Instead, Carlson began using her own personal bank account as a conduit for funds flowing to and from Alliance (including brokerage fees to Alliance). She also ceased following the procedure for maintaining certain original papers at the main office and even began maintaining files at her home. Alliance knew or should have known that Carlson was using her personal bank account as a conduit for Alliance funds. Alliance's ledgers showed these transactions, and Alliance's bookkeeper wrote reimbursement checks to Carlson for some of them. Since Ronald Lohr, Alliance's qualifying broker with supervisory responsibility over the Beach office, did not testify, the evidence did not preclude the possibility that he had actual or constructive knowledge of this deviation from official policy. Regarding Carlson's maintenance of files (including original papers normally kept at the main office) at her house, Alliance did not have actual or constructive knowledge of this deviation from official policy. Rather, Alliance's minimal supervision of the Beach office gave Carlson the opportunity to deviate from that official policy without detection. Through the combined effect of these circumstances, Carlson was able to operate as a salesman for Alliance in connection with the following transactions while concealing the transactions from her employer and wrongfully retaining brokerage commissions which properly should have been paid over to Alliance. At the conclusion of these transactions (except one), Carlson "pitched" her file on it. In February, 1983, Carlson solicited and obtained $1,000.00 as rental payments from William Russ, as a tenant, for the rental of Unite 908, Clearwater Point Condominium, 830 S. Gulfview Blvd., Clearwater Beach, Florida owned by Bernhardt Elsen. In March, 1983, Carlson solicited and obtained $680 from Carl Dotterman, as a tenant, for the rental of Elsen's condominium. Notwithstanding that Carlson had received $1,680, Carlson advised Bernhardt Elsen that she had only received $1,600. Carlson disbursed $1,513.30 to Bernhardt Elsen, calculated as $1,600, minus $160 being a 10 percent management fee, plus $73.39 as reimbursement for payment of an electric bill. Carlson collected, received and disbursed the Russ and Dotterman rental money in her own name. She engaged in the Elsen rental property management activities and received compensation for the performance of real estate brokerage services all without the prior knowledge and consent of her employing broker, Alliance Real Estate, Inc., or any of its qualifying brokers. In February and March, 1983, Carlson negotiated for her son Martin Carlson, as tenant, and Dr. Rolando Perez, as owner, for the rental of Unit 207, Commodore Building, Clearwater Point Condominiums, Clearwater Beach, Florida, owned by Dr. Rolando Perez. Rent was to be $800. Carlson, for her son, paid Dr. Rolando Perez $720 calculated as $800 minus $80 being a 10 percent management fee. Carlson collected, received and disbursed the Carlson rental money in her own name. She engaged in the Perez rental property management activities and received compensation for the performance of real estate brokerage services all without the prior knowledge and consent of her employing broker, Alliance Real Estate, Inc., or any of its qualifying brokers. In April, 1983, Carlson solicited and obtained $500 as rental payment from a Mr. and Mrs. Scalise, as tenants, for the period April 9, 1983, to April 15, 1983, for the rental of Unit 701, Sailmaster Building, Clearwater Point Condominiums, Clearwater Beach, Florida, owned by Anthony and Jeanette Eman. On or about April 14, 1983, Carlson solicited and obtained a $100 rental deposit from Mr. and Mrs. Scalise for the rental of Eman's condominium for a period in 1984. On or about April 15, 1983, Carlson disbursed to Mr. and Mrs. Eman the $100 deposit and $200 of the $500 rental payment with $300 thereof being retained by Carlson as a management fee. Carlson collected, received and disbursed the Scalise rental money in her own name. She engaged in the Eman rental property management activities and received compensation for the performance of real estate brokerage services all without the prior knowledge and consent of her employing broker, Alliance Real Estate, Inc., or any of its qualifying brokers. In January and February, 1983, Carlson solicited and obtained $2,400 as rental payments from Ernest Pfau, as a tenant, for the rental of Unit 605, Shipmaster Building, Clearwater Point Condominiums, Clearwater Beach, Florida, owned by Joseph Seta. Carlson disbursed to Joseph Seta $2,160 calculated as $2,400 minus $240 being a 10 percent management fee. Carlson collected, received and disbursed the Pfau rental money in her own name. She engaged in the Eifert rental property management activities and received compensation for the performance of real estate brokerage services all without the prior knowledge and consent of her employing broker, Alliance Real Estate, Inc., or any of its qualifying brokers. On or about June 7, 1983, Carlson solicited and obtained a $100 rental deposit from Lawrence Augostino, as a tenant, for the rental of Unit 706, 450 Gulf Blvd., South Building, Clearwater Beach, Florida, owned by Dr. Donald F. Eifert. Carlson was to hold the deposit until she was able to obtain a listing on the rental property. While waiting for a listing on the Eifert property, Alliance, through Mr. Mastro, became aware of one of Carlson's "secret clients," Mr. Elsen, and confronted Carlson about it. In response to Mastro's demand, she retrieved the entire Elsen file from her home. When Mastro learned about a second "secret client," Dr. Perez, a short time later, Mastro immediately terminated Carlson from her employment on June 15, 1983. Carlson did not advise Alliance of the Augostino deposit and was not able to get a good address for Augostino to return the deposit before she left the Clearwater area to go to Michigan for a month. Carlson collected and received the Augostino deposit in her own name. She engaged in the Eifert rental property management activities without the prior knowledge and consent of her employing broker, Alliance Real Estate, Inc., or any of its qualifying brokers. As previously alluded to, Carlson produced evidence of having used her personal checking account as a conduit for funds flowing between Alliance and its customers (including brokerage fees payable to Alliance) with the actual or constructive knowledge of Lohr and Alliance's bookkeeper. But Carlson was unable to produce any similar evidence (such as Alliance's ledgers or her cancelled checks) in response to the absence of any Alliance corporate records indicating that Carlson paid any of the brokerage fees generated in the foregoing transactions over to Alliance. Carlson's self-serving and vague testimony that she did not owe Alliance any money was insufficient in this respect.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Commission enter a final order suspending respondent's license for two (2) years for violating Section 475.25(1)(b), Florida Statutes (1983). RECOMMENDED this 3rd day of July, 1984, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 1984. COPIES FURNISHED: John Huskins, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32002 Bruce M. Harlan, Esquire 110 Turner Street Clearwater, Florida 33516 Harold Huff, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues are as follows: (a) whether Respondent acted as a real estate agent/sales associate without being the holder of a valid and current real estate license in violation of Section 475.42(1)(a), Florida Statutes, and therefore, in violation of Section 455.228, Florida Statutes; and, if so, (b) what penalty should be imposed.
Findings Of Fact Petitioner is the state agency charged with the responsibility of regulating the real estate industry pursuant to Chapters 455 and 475, Florida Statutes. As such, Petitioner is authorized to prosecute cases against persons who operate as real estate agents/sales associates without a real estate license. At all times material, Respondent was not a licensed Florida real estate agent/sales associate or broker. From January 2005 to June 2007, Respondent worked as a secretary/administrative assistant to Gail Gee, licensed Florida real estate agent and broker affiliated with Tradewinds of Mandalay, Inc., trading as Tradewinds Realty, a brokerage corporation located in or near Crystal River, Florida. Respondent was not the only secretary in the office. In 2005, Ms. Gee had three real estate sales offices. The offices were located in Beverly Hills, Ozello, and Crystal River, Florida. Respondent began working at Ms. Gee's main office in Ozello, Florida. Ms. Gee was at that office seven days a week in 2005. Ms. Gee paid Respondent hourly wages. Respondent's duties included the following pursuant to Ms. Gee's instructions: (a) answering the phone and taking messages; (b) faxing documents and e-mail listings; (c) placing advertisements; (d) drafting contracts; and (e) researching public property records. Ms. Gee took Respondent to a convention so they could participate in a class where the need for an agent to have a policy and procedure manual was discussed. Ms. Gee bought a computer disc of the proposed manual and subsequently used it to create one of her own. Ms. Gee had all of her associate agents and employees sign the manual. The manual advised the employees, including Respondent, what they could and could not do. Sometime before February 2005, Bruce Sculthorpe of Ann Arbor, Michigan, found some property in Citrus County, Florida, listed for sale on the internet. One property was located at 9844 North Burr Oak Terrace, in the Crystal Manor area of Crystal River, Florida. The other property consisted of two lots, Lots 206 and 207, in Waterman Subdivision, in Citrus County, Florida. Mr. Sculthorpe then contacted Ms. Gee to make further inquiries about the properties. On or about February 7, 2005, Bruce and Julie Sculthorpe brought the property located at 9844 North Burr Oak Terrace from Mary Lynn Netzel, for $25,063.50. As a result of this transaction, Ms. Gee received a commission in the amount of $2,500. The Sculthorpes bought the property without seeing it. On or about February 8, 2005, the Sculthorpes listed their property located at 9844 North Burr Oak Terrace, Crystal River, Florida, with Ms. Gee. The exclusive listing agreement indicates that the sale price for the property was $75,000 and that the Sculthorpes agreed to pay Ms. Gee a 10 percent commission. Later in February 2005, Mr. Sculthorpe learned that Respondent worked for Ms. Gee. Neither Ms. Gee nor Respondent ever represented to the Sculthorpes that Respondent was a licensed real estate agent. In March or April of 2005, Julie Sculthorpe came to Florida to see the property located at 9844 North Burr Oak Terrace for the first and only time. Ms. Sculthorpe made the trip with two female friends. Ms. Sculthorpe was over an hour late to her appointment with Ms. Gee who had another appointment pending. Ms. Gee understood that Ms. Sculthorpe just wanted to see her property and was not interested in purchasing property or doing any business. Ms. Gee introduced Ms. Sculthorpe to Respondent as her secretary/assistant. Ms. Gee asked Respondent to use Ms. Gee's van to take Ms. Sculthorpe and her friends to see the Sculthorpes' property and the surrounding properties because they were unfamiliar with the area. Respondent did not "show" Ms. Sculthorpe other properties with the intent to interest the Sculthorpes in future purchases. The trip consisted of going to 9844 North Burr Oak Terrace and back without stopping anywhere else to look at property. During the trip to 9844 North Burr Oak Terrace, Ms. Sculthorpe was not impressed with the surrounding property. She indicated that she and her husband would not be interested in property that looked like "Sanford and Son," with "trailers and license plates in their decorative stuff all over the front of their yards and stuff." Respondent did not advise Ms. Sculthorpe to lower the price on the property located at 9844 North Burr Oak Terrace in order to sell it quickly. Ms. Gee eventually made that suggestion to the Sculthorpes. The record is silent regarding the circumstances of the Sculthorpes’ purchase of property in the Waterman subdivision. On or about June 28, 2005, the Sculthorpes listed their properties, Lots 206 and 207, in the Waterman Subdivision, Crystal River, Florida, with Ms. Gee. The listing price for each lot was $175,000. The Sculthorpes agreed to pay Ms. Gee a commission in the amount of 8 percent on each lot. On or about August 1, 2005, Gustavo Roperto and Nathalie Roperto of West Palm Beach, Florida, bought property located at 9844 North Burr Oak Terrace, Crystal River, Florida, from the Sculthorpes for the contract sales price of $70,000. As a result of this transaction, Tradewinds Realty and Exit Realty, of Naples, Florida, each received $2,800 in commission. The Sculthorpes made about $40,000 in profit in about six-months time. Ms. Gee negotiated the sale price of the property located at 9844 North Burr Oak Terrace. Respondent's only involvement in the sale was in facilitating communication between the Sculthorpes and Ms. Gee. Respondent did not locate the buyers, Mr. and Mrs. Roperto, or make any decision or make any statement about the property to the Sculthorpes, other than as instructed by Ms. Gee. On September 3, 2005, Julie Sculthorpe's son died. Mr. Sculthrope had subsequent conversations with Respondent regarding the need to find a home for the deceased son's dogs. Later, Mr. Sculthorpe talked to Respondent about other personal matters, like finding a Christmas gift for his wife, Julie Sculthorpe. On or about September 21, 2005, the Sculthorpes signed a contract to purchase property located at 1106 South Ozello Trail in Citrus County, Florida, from Willard Radcliffs of Brooksville, Florida. The property is also described as Lots 9 and 10, St. Martians Esturary Retreats, Unit 1, in Citrus County, Florida. The Sculthorpes agreed to pay Mr. Radcliffs $285,000.00 for the property. The sales contract indicated that Tradewinds Realty would receive commissions as the selling and listing real estate agent. The sale of the property located at 1106 South Ozello Trail closed on October 27, 2005, giving the Sculthorpes title to the property. Tradewinds Realty received a commission in the amount of $17,000 for the sale of the property. On or about October 7, 2005, the St. Lucie Development Corporation, located in Vero Beach, Florida, bought property described as Lot 206, Waterman Subdivision in Crystal River, Florida, from the Sculthorpes for the contract sales price of $160,000. As a result of this transaction, Tradewinds Realty and Kevin S. Hawkins each received commissions in the amount of $6,400. On or about October 7, 2005, Orion Property and Sales, Inc., located in Ft. Pierce, Florida, bought property described as Lot 207, Waterman Subdivision in Crystal River, Florida, from the Sculthorpes for the contract sales price of $160,000. As a result of this transaction, Tradewinds Realty and Kevin S. Hawkins each received commissions in the amount of $6,400. Lots 206 and 207, located in the Waterman Subdivision in Crystal River, Florida, are sometimes referred to in the record as the Hunt Point Lots. There is no persuasive evidence that Respondent had any involvement in the sale of the Hunt Point property to St. Lucie Development Corporation and to Orion Property and Sales, Inc., other than as instructed by Ms. Gee. On or about November 15, 2005, the Sculthorpes listed the property located at 1106 Ozello Trail (Lots 9 and 10 in St. Martians Estuary Retreats) for sale with Ms. Gee. The Sculthorpes signed on exclusive listing agreement to sell Lot 9 for $249,000. They signed another exclusive listing agreement to sell Lot 10 for $249,000. In both agreements, the Sculthorpes agreed to pay Ms. Gee a commission in the amount of 8 percent. Ms. Gee subsequently advertised Lot 9 in St. Martians Estuary Retreats as for sale for $214,000. At the time of the hearing, the Sculthorpes still owned the property located at 1106 Ozello Trail (Lots 9 and 10 in St. Martins Esturary Retreats). When the Sculthorpes purchased the property at 1106 Ozello Trail, there was a stilt house on one lot and a screened enclosure with a fireplace on the other lot. The Sculthorpes paid to have both structures removed before listing the lots for sale. Respondent was not involved in finding someone to remove the structures for Bruce and Julie Sculthorpe. Respondent began working part-time for another real estate broker/developer, John Holdsworth, sometime toward the end of 2005. Mr. Holdsworth owned a restaurant across the street from Ms. Gee's office. Mr. Holdsworth hired Respondent to manage the restaurant because of her prior experience owning and operating a pizzeria. Ms. Gee and Mr. Holdsworth paid Respondent by the hour for time spent in each respective business. Ms. Gee hired another secretary around December 2005, to do the work Respondent no longer had time to do. During his business relationship with Ms. Gee, Mr. Sculthorpe would call her, repeatedly asking, "What's next?" He also called Respondent repeatedly, wanting information about his properties or just to discuss his personal life. Mr. Sculthorpe used e-mail and Instant Messaging so much that, on one occasion, Ms. Gee instructed Respondent to turn off the computer so she could get other work done. Ms. Gee and Respondent were not the only people in the office answering Mr. Sculthorpe's calls. Other secretaries in the office answered some of the calls. On some occasions, the office staff would look at each other and ask who wanted to take the call. On other occasions, Respondent placed Mr. Sculthorpe's call on speakerphone. Mr. Sculthorpe "would talk and talk and talk and talk" while Respondent continued to do her work. At some point in time, Mr. Sculthorpe advised Respondent that he did not like paying commissions to Ms. Gee. Respondent then recommended that Mr. Sculthorpe take the same real estate licensure course that she was taking. Respondent gave Mr. Sculthorpe the web site for the real estate school. At some point in time, Mr. Sculthorpe's sister-in-law, Linda Wilkinson went to Crystal River. Ms. Wilkinson was a real estate agent in another state. Ms. Gee showed Ms. Wilkinson some property located in an area known as Bimini Bay. Respondent never met with or talked to Ms. Wilkinson. During the hearing, Mr. Sculthorpe testified that Respondent encouraged him to buy another piece of property. According to Mr. Sculthorpe, Respondent asked him to refer her to another buyer after he refused to buy the property. Mr. Sculthorpe's testimony in this regard is not persuasive. Toward the end of the Sculthorpes' relationship with Ms. Gee, Respondent was still working only part-time with Ms. Gee. After Mr. Holdsworth closed the restaurant, Respondent continued to work for Ms. Gee. In June 2006, Ms. Gee moved Respondent from the Ozello office to a new office that became Ms. Gee's primary office. In June 2007, Respondent quit working for Ms. Gee because she could no longer afford to pay Respondent a salary. At $33 per hour for an investigator's time, Petitioner spent $412.50 investigating this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of law, it is Recommended: That Petitioner enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 29th day of September, 2010, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD 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 29th day of September, 2010. COPIES FURNISHED: Jennifer Leigh Blakeman, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N-801 Orlando, Florida 32801 Cara S. Cacioppo 5756 West Costa Mesa Lane Beverly Hills, Florida 34465 Heather A. Rutecki, Esquire Rutecki & Associates, P.A. Bank of America Tower 100 Southeast Second Street, Suite 2950 Miami, Florida 33131 Thomas W. O’Bryant, Jr., Director Division of Real Estate 400 West Robinson Street, Suite N-801 Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
