The Issue The issue in this case is whether Respondent violated Sections 455.228, 475.25(1)(e), and 475.42(1)(a), Florida Statutes (1997), by operating as an unlicensed broker or salesperson. (All Chapter and Section references are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Respondent is not licensed in the state as a real estate sales person or broker but has been engaged in the business of real estate investment in Florida for approximately six years. Respondent generally maintains investments in approximately 50 real estate properties in the state at a given point in time. Of those properties, Respondent typically holds approximately 15 properties in his individual name and approximately 35 properties in the name of Results Home Buyers of Melbourne ("Results"), Respondent's wholly-owned Florida corporation. Respondent's real estate investment business generally involves the purchase and sale of real property that is financially distressed. Respondent purchases real property that is either in or near foreclosure or property for which the sellers are experiencing difficulty servicing the existing indebtedness. Respondent purchases properties by assuming the existing debt, paying off the debt at a discount, and then selling the properties to subsequent purchasers for a profit. Closing of the subsequent sale of a particular property may occur simultaneously with the closing of Respondent's purchase of the property or sometime thereafter. Respondent induces subsequent purchasers with non-qualifying financing and purchase prices that are discounted less than the amount of discount Respondent obtains from existing lenders. Respondent begins each real estate investment by obtaining some form of an option on a property for a fixed time period. The option may take the form of a simple option to purchase property. In most instances, however, the option takes the form of a Standard Purchase and Sales Agreement (a "purchase agreement"). The purchase agreement is subject to financing discussed subsequently in this Recommended Order. If Respondent is unable to obtain financing, the seller may retain only that portion of the binder deposit required to pay sales and loan processing costs incurred by the seller. During the option period, Respondent conducts a title search to determine the state of the title, the identity of record lien holders, and the amount of each lien. Respondent also attempts to obtain financing by negotiating with the existing lenders a discounted pay off of the existing indebtedness. If Respondent fails to negotiate a satisfactory discount, Respondent allows the option to lapse. If Respondent negotiates a satisfactory discount, Respondent exercises the option and closes on the property. When Respondent closes on a property, Respondent generally pays all closing costs and utilizes a title company for the closing. Prior to closing, Respondent places the funds required to pay off the discounted indebtedness in escrow. Respondent generally uses his own money to fund the escrow if Respondent has obtained a subsequent purchaser for the property. Respondent generally uses a third party lender to fund the escrow if Respondent has not obtained a subsequent purchaser, if Respondent must incur improvement costs before selling the property, or if the subsequent purchaser must rent the property for some time before the purchaser can close on the property. There is no written escrow agreement. The escrowed funds are subject only to those conditions in the written documents between Respondent and the seller. The title company disburses escrow funds upon Respondent's verbal authorization. When Respondent purchases real property, title generally does not pass by warranty deed to Respondent. Title passes to a land trust. Respondent creates a land trust in three steps. Each step is evidenced by a separate document, but all three documents are executed simultaneously. In the first step, the seller enters into an Agreement and Declaration of Trust with Respondent (the "trust agreement"). The trust agreement names the seller as the beneficiary and either Respondent or Respondent's nominee as the trustee. The trust agreement is intended to preserve Respondent's anonymity and to insulate the assets of Respondent and Results from any claims or litigation that may arise out of Respondent's real estate investment business. In the second step, the beneficiary of the trust, who is also the seller, executes a Warranty Deed to Trustee (the "warranty deed"). The warranty deed is generally recorded in the public records of the county in which the property is located. It reflects record title in the trustee who is generally Respondent's nominee. However, Respondent sometimes acts as trustee. In the third step, the beneficiary of the trust, who is also the seller, assigns his or her beneficial interest in the trust to either Respondent or Results. The assignment transfers all beneficial interest in the property, except legal title, to either Respondent or Results. The recorded legal title remains in the trustee. Respondent believes that he insulates himself and his company from liability for claims by retaining record title in the trustee and assigning beneficial ownership from the seller, as the trust beneficiary, to Respondent or Results. Respondent is the assignee in approximately 15 out of 50 property transactions, and Results is the assignee in approximately 35 of 50 transactions. The assignee has exclusive authority to designate or change the trustee. Petitioner claims that in 1997 Respondent engaged in the practice of real estate on behalf of the owners of four residences. Respondent claims that he engaged in the activities alleged in the Administrative Complaint in his own behalf as the beneficial owner of the four properties or as the sole shareholder of the beneficial owner. Three of the four residences at issue in this proceeding are located in Satellite Beach, Florida. The fourth property is located in West Melbourne, Florida. The three properties in Satellite Beach are located at: 340 Ocean Spray Avenue (the "Ocean Spray property or transaction"); 697 Hedgecock Square North (the "Hedgecock property or transaction"); and 479 Skylark Boulevard (the "Skylark property or transaction"). The property in West Melbourne is located at 633 Manor Place (the "Manor property or transaction"). On February 22, 1997, Respondent executed separate purchase agreements for the Hedgecock, Manor, and Skylark properties. On March 6, 1997, the parties executed separate trust agreements, warranty deeds, and assignments in the Hedgecock and Manor transactions. On March 17, 1997, the parties executed the trust agreement, warranty deed, and assignment in the Skylark transaction. The warranty deed in each transaction expressly stated that the interests of the beneficiaries were personal property. In the Hedgecock transaction, Respondent was designated as the trustee. The warranty deed transferred title to Respondent, and the seller assigned her beneficial interest in the property to Results. The warranty deed was not recorded because the seller remained in possession of the property while she attempted to purchase a replacement residence. In the Manor and Skylark transactions, Ms. Sonia Souza, an unrelated nominee of Respondent, was designated as the trustee. The warranty deeds transferred title in both properties to Ms. Souza. Neither property was occupied, and the warranty deeds were recorded in both transactions. The seller of the Manor property assigned her beneficial interest in the property to Results. The seller of the Skylark property assigned her beneficial interest to Respondent. Respondent paid the outstanding indebtedness on the Manor and Skylark properties and sold the Skylark property sometime in September or October 1997. Respondent still owns the Manor property and has made improvements to the property totaling approximately $30,000. At the seller's request, Respondent transferred title in the Hedgecock property back to the seller in November 1997, when the seller's attempt to purchase a replacement residence failed. On May 19, 1997, Respondent executed an Option to Purchase the Ocean Spray property. The option terminated on August 19, 1997. Between May 19 and August 19, 1997, Respondent attempted to secure a buyer for the property. However, intervening legal claims against the property prevented the seller from conveying clear title, and Respondent allowed the option to lapse. The seller of the Ocean Spray property eventually resolved the pending claims and has subsequently attempted to sell the property to Respondent. However, Respondent has declined to purchase the property pending the outcome of this proceeding. As the Administrative Complaint alleges, in relevant part, Respondent attempted to sell the four properties at issue in this proceeding between August 7 and 19, 1997. Respondent distributed flyers to licensed real estate brokers and salespersons concerning each property. Each flyer included a statement that the owner wanted offers, details of the particular property, and a statement that the owner would pay brokers and salespersons a $500 referral fee or a four percent commission for the sale of each property. Between August 7 and August 19, 1997, Respondent was not acting as a broker within the meaning of Section 475.01(1)(a). Respondent was not acting "for another." Respondent or Respondent's wholly owned corporation was the beneficial owner of the Hedgecock, Manor, and Skylark properties even though Respondent was the record owner of only the Skylark property. In the Ocean Spray transaction, the Option to Purchase gave Respondent a contractual right to sell the property in his own behalf. The sellers of all four properties at issue in this proceeding did not enter into a listing agreement with Respondent. The sellers did not promise, either in writing or verbally, to pay a commission or other compensation to Respondent. Respondent did not promise to pay the sellers any portion of the sale proceeds Respondent received from subsequent purchasers. Respondent was solely liable for the commission and referral fee described in the brochures that Respondent distributed to licensed real estate brokers and salespersons. The only economic benefit for Respondent to sell the properties to subsequent purchasers was the difference between the sale price received by Respondent and the discounted indebtedness paid by Respondent. The gross profit thus derived by Respondent was reduced by the commissions, if any, paid by Respondent to licensed real estate brokers and salespersons. The sellers in all four transactions at issue in this proceeding had no legal right to approve the discounted payoff of the existing indebtedness or the sale price at which Respondent sold the properties. Nor did the sellers have any right to approve any other terms or conditions of any sale by Respondent. Finally, the sellers did not have the right to transfer title to the property. Except for the Ocean Spray transaction, the risk of loss and the economic risk of not selling the property in each transaction was borne by Respondent during the time that Respondent was marketing the properties. In fact, Respondent was unable to sell the Manor property, and Results has paid for approximately $30,000 in improvements to the property.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding Respondent not guilty of violating Sections 455.228, 475.42(1)(a), and 475.25(1)(e). DONE AND ENTERED this 22nd day of December, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1999. COPIES FURNISHED: Herbert S. Fecker, Division Director Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Barbara D. Auger, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Sunia Y. Marsh, Esquire Department of Business and Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Michael R. Riemenschneider, Esquire O'Brien, Riemenschneider, Kancilia and Lemodidia, P.A. 1686 West Hibiscus Boulevard Orlando, Florida 32901
The Issue An Administrative Complaint dated October 21, 1998, alleges that Respondent committed violations of Chapter 475, Florida Statutes, by dishonest dealing, culpable negligence, or breach of trust; by failing to account for delivering certain funds; and by violating a lawful order of the Real Estate Commission. The issues in dispute are whether those violations occurred and if so, what penalty is appropriate.
Recommendation Based on the foregoing it is, hereby RECOMMENDED: that the Agency enter its Final Order finding Respondent did not commit the alleged violations and dismissing the Administrative Complaint. DONE AND ENTERED this 27th day of April, 1999, in Tallahassee, Leon County, Florida. MARY CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 1999. COPIES FURNISHED: Ghunise Coaxum, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street N-308 Post Office Box 1900 Orlando, Florida 32802-1900 Howard Hadley, Esquire 2352 Carolton Road Maitland, Florida 32751-3625 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 William Woodyard, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issues are whether Respondent has violated Section 507.07(6)(a), Florida Statutes (2005), by using a contract for intrastate moving services that purports to limit a consumer's statutory rights to certain minimum liability protections, and if so, what penalty should be imposed.
Findings Of Fact Respondent is registered with Petitioner as an intrastate mover. Respondent's registration number is IM 1186. Respondent uses a two-page preprinted contract form (the contract) for Florida intrastate moves. Before each move, Respondent prepares a copy of the contract to be signed by the consumer/shipper. On April 27, 2006, one of Petitioner's investigators met with Tevel Bennoon, Respondent's owner/director, at Respondent's business location. The meeting was initiated by a consumer complaint against Respondent. During the meeting, Petitioner's investigator reviewed the contract. At the conclusion of his review, the investigator served Respondent with an Investigative Field Report, the Administrative Complaint, a proposed settlement agreement, a Notice of Rights, and a copy of the intrastate moving statutes. The field report states that Respondent violated Sections 507.05, 507.06(a), and 507.06(b), Florida Statutes (2005), in the following ways: "Business was not giving a total of all costs prior to providing moving services. Business's contract had provisions that either waived or limited consumer's rights." There is no competent evidence that the Florida Movers and Warehouseman's Association has approved the contract for its members' use. There is evidence that Petitioner has never approved a form contract for intrastate moving services under Chapter 507, Florida Statutes (2005). The second page of the contract lists preprinted "Terms and Conditions." Section 1 of this list is titled "Liability of the Company," which states as follows in relevant part: The Company is not responsible for injury or damage to any fragile articles (articles susceptible to breakage or crushing), unless such fragile articles are both packed and unpacked by its employees and subject to the further conditions that such packing, unpacking or other handling is performed in a negligent manner by the Company. The Company will not carry and/or be liable in any way for the loss of damage to currency, precious stones, documents, stamps, securities, species, silverware, jewelry, or any article of extraordinary value unless such article was specifically declared in writing, and unless the additional valuation charges are paid by the Customer. * * * The carrier's liability with regard to sets or matched pieces shall be limited to repair or replacement whichever is less of the lost or damaged pieces only, and shall not extend to repair, replacement, or recovering the entire set, but in no event to exceed the released or declared value as indicated. The Company shall not be liable for loss or damage occurring after the property has been delivered to or receipted for by the consignee or shipper or the authorized agent of either. When the Company is directed to unload or to deliver property (or render any services) at a place or places at which the Customer or its agents is not present the property shall be at the risk of the Customer after unloading or delivery. * * * The Company will not be liable for loss or damage caused by ordinary wear and tear, leakage, mold, mildew, termites, rodents, vermin, moths, and other insects, rust, fumigation, heat, change in temperature, or other atmospheric conditions, natural deterioration, inherent vice or defect of the property, or damage to particle board, or for loss damage or delay contributed to or caused by the act or omissions of the Customer or by acts of war, terrorism, insurrection, nuclear fusion, strikes, labor disturbances, fire, riots, or by any acts of God, or any cause beyond the Company's control. The Company is not responsible for the mechanical or electrical malfunction of or any article such as, but not limited to computers and computer equipments, piano, radio, television set, VCR, DVD player, barometer, refrigerator, phonograph, clock, air conditioner, or other instrument of appliance whether or not such articles are packed or unpacked by the Company.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner enter a final order, requiring Respondent to pay an administrative fine in the amount of $5,000. DONE AND ENTERED this 28th day of September, 2006, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 2006. COPIES FURNISHED: Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street Mayo Building, Suite 520 Tallahassee, Florida 32399 Eric H. Miller, Esquire Department of Agriculture and Consumer Services 407 South Calhoun Street Mayo Building, Suite 520 Tallahassee, Florida 32399 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Tevel Bennoon, Owner/Director Movers Van Lines, Inc. 1721 Ranger Avenue, Unit B Deland, Florida 32724
The Issue Whether Respondent is guilty of misrepresentation, false promises, false pretenses, dishonest dealing, trick, scheme or device in a real estate transaction in violation of Section 475.25, Florida Statutes. Whether the license of Respondent should be revoked or suspended or whether Respondent should be otherwise disciplined.
Findings Of Fact Respondent is a registered real estate salesperson who holds License No. 0099812. She was employed as a "listing solicitor" by World Wide Property Services, Inc. (World Wide), a registered real estate broker (now dissolved), from March 10, 1976 through July 1, 1976, soliciting listings for real estate in Florida. The solicitation was by telephone nationwide, except Florida. Seymour L. Rottman was President of World Wide, and Lee Small was Vice President of the corporation during the time Respondent was employed. The purpose of World Wide was to secure listings of and purchasers for various Florida properties. Mr. Rottman was a subpoenaed witness for Petitioner at the subject hearing. During Respondent's period of employment, he and Mr. Small were in charge of hiring salesmen for the corporation and hired Respondent. Respondent was employed to obtain listings by telephone from property owners who lived out of state but owned Florida property. The procedure followed was for a salesman to call an out-of-state land owner picked from a list of prospects and inquire if he or she would be interested in selling their property at a higher price than it had been purchased for. This was termed a "front" call, and the salesman was termed as a "fronter". If the prospect expressed interest in listing the property, his or her name was provided to World Wide, who then mailed literature to the property owner describing the efforts that would be made by that organization to sell the property. Enclosed with this material was a listing and brokerage agreement. This agreement provided that the owner of the property would pay a prescribed listing fee to World Wide, which would be credited against a 10% commission due that firm upon sale of the property. In return, the corporation agreed to include the property in its "listing directory" for a one-year period, directs its efforts to bring about a sale of the property, advertise the property, as deemed advisable, in magazines or other mediums of merit, and to make an "earnest effort" to sell the property. The accompanying literature explained that the listing fee was necessary in order to defray administrative costs of estimating the value of the property, merchandising, advertising, brochuring and cataloging the information. The material also stated that advertising would be placed in various foreign countries and cities of the United States. In addition, it stated that the property would be "analyzed", comparing it to adjacent property to arrive at a price based on recent sales of neighboring property and also review the status of development and zoning in the immediate area of the property to assist in recommending a correct selling price for approval of the owner. During the course of the calls to prospects, Respondent advised them that the property would be advertised internationally and in the United States and that bona fide efforts would be made to sell the property. She represented herself as a salesman for that organization. After the promotional literature was sent to the prospect, the salesmen, including Respondent, made what was called a "drive" call to answer any questions and to urge that the property be listed. After making these calls, Respondent had no further contact with the property owner. The listing fee was $325.00. The salesmen received approximately one-third of the fee, about $100.00 per listing. The salesmen, including Respondent, telephoned the prospects and then read from the script entitled "front" and "drive". The instructions from the broker was to stay within the script, but Respondent was not monitored at all times. During the course of operation of less than a year, World Wide secured about 200 listings and grossed approximately $80,000.00 to $90,000.00 in the "advance fee" listing, but no sales were made. Respondent failed to appear at the hearing, as noticed for March 8, 1976, at 1:00 p.m. Her hearing was continued until March 9, 1976, at 1:30 p.m., to give her an additional period of time in which to appear, but Respondent failed to appear. She did not dispute the charged filed by Petitioner in its administrative complaint. Petitioner contends that while a salesperson for World Wide, Respondent solicited and obtained listings by telephone from property owners and that as an inducement to list the property, she falsely represented that the property could be sold for a price far in excess of its purchase price, that a bona fide effort would be made to sell the property, and that it would be listed nationally and internationally and that the company had foreign investors wanting to purchase United States property.
Recommendation Reprimand the Respondent in writing. DONE and ENTERED this 20th day of June, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Kenneth M. Meer, Esquire Florida Real Estate Commission Post Office Box 1900 400 West Robinson Avenue Orlando, FL 32801 Kimberly Zimmerman 449 N.W. 8th Street Apt. 1 Miami, FL 33136
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what action should be taken.
Findings Of Fact At all times material hereto, William D. Manser (Respondent) was licensed in Florida as a real estate broker, having been issued license number BK 0427410. Respondent was a broker/officer of United Equity Marketing, Inc., located at 6635 West Commercial Boulevard, Tamarac, Florida. Since October 1, 1995, his broker's license has not been on an active status due to non-renewal of the corporate registration. By warranty deed dated February 14, 1992, James and Angela Cunduff became owners of property located at 6531 Southwest Seventh Place, Fort Lauderdale, Florida. By Articles of Agreement for Deed dated February 25, 1992, James and Angela Cunduff agreed to convey the property to Respondent's corporation, United Capital Networks, Inc., if certain conditions were complied with. The conditions included Respondent's corporation making all the mortgage payments and paying the taxes on the property, and keeping the buildings on the property properly insured. In return, James and Angela Cunduff agreed, among other things, to execute a warranty deed to Respondent's corporation and to place the warranty deed in escrow. Respondent and the Cunduffs agreed that the Articles of Agreement for Deed would not be recorded. Respondent looked upon himself and conducted his actions as the owner of the property at 6531 Southwest Seventh Place, Fort Lauderdale, Florida. On October 31, 1995, Mary J. Augustine signed a lease agreement for the rental of a portion of the home, the rear of the home, located at 6531 Southwest Seventh Place, Fort Lauderdale, Florida. The rear area of the home had its own entrance. The rental was for one year, beginning November 15, 1995, and ending October 30, 1996. Respondent used part of the home as a storage area. At the front of the home, there were two separate entrances. One of the separate entrances was for the storage area. The other separate entrance was for another area of the home. The lease agreement indicated United Equity Markets, Inc., as the managing agent of the property. The lease agreement required signatures of the "Tenant" and the "Lessor." Ms. Augustine signed the lease as "Tenant," and Respondent signed as "Lessor," adding the word "Agent" next to his signature. United Equity Markets, Inc., is Respondent's corporation. Prior to the signing of the lease, Respondent had met with Ms. Augustine at the house at least twice before she signed the lease agreement. Respondent represented himself as the manager of the property. The home was listed as a single-family residence. Ms. Augustine believed that the home would be occupied by Respondent, another tenant, and herself. The evidence is insufficient to show and make a finding that three families would live or had lived at the home. In accordance with the lease agreement, Ms. Augustine gave Respondent $1,290, as a security deposit. Ms. Augustine had also given Respondent, prior to the security deposit, $645 for the first month's rent. Ms. Augustine wanted to move into the rear portion of the home approximately two weeks prior to the beginning of the rental period. Respondent agreed that Ms. Augustine could have access to the home and clean the rear area where she was going to reside. Ms. Augustine had problems with, such things as, the refrigerator, oven, and swimming pool. She decided not to rent the home. Ms. Augustine demanded her deposit and first month's rent from Respondent. However, he refused to return the monies. The lease agreement contained a default provision, providing for the recovery of damages by the lessor if the tenant defaulted. The lease agreement also contained a security provision, providing for the non-refundable nature of the security deposit under certain conditions, including termination of the lease prior to its expiration. Ms. Augustine attempted but could not contact Respondent at his office because he had closed his office prior to October 1995. Ms. Augustine attempted also to contact Respondent at the telephone number that he had provided her, which was his home number. She was again unsuccessful due to Respondent having his telephone disconnected because he had gone to New York to care for his ill sister. Respondent did not provide Ms. Augustine with an accounting of the monies. Respondent was conducting his own personal real estate transaction with Ms. Augustine.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against William D. Manser. DONE AND ENTERED this 24th day of February, 1999, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1999.
The Issue Whether Petitioner was eligible for membership in the Florida Retirement System (FRS) during the effective dates of the Client Service Agreement (Agreement) between Petitioner and ADP TotalSource Services, Inc. (TotalSource).1 Whether Respondent is estopped to deny Petitioner’s request to purchase retirement credit for the subject employees during the seven-month period during which the Agreement was in effect.
Findings Of Fact TCT is an independent special taxing district of local government established pursuant to Section 1.01(A)(11) of the Miami-Dade County Home Rule Charter; Ordinance No. 02-247, Sections 1-11 (adopted December 3, 2002); and Section 125.901, Florida Statutes, et. seq., for the provision of children’s services. TCT is devoted to funding “improvements for the children of Miami-Dade County in the areas of health, safety, parental responsibility, community responsibility and other necessary and important services.” Miami-Dade County Code Art. CIII, §§ 2-1521-2-1531. Other special taxing districts for services in the State of Florida participate in the FRS. On July 23, 2003, officials from TCT contacted DOR to communicate TCT’s desire to participate in FRS and request instructions on how to enroll its employees for FRS retirement benefits. On July 24, 2003, Ms. Smith, acting in her capacity as a benefits administrator employed by Respondent, forwarded to TCT an FRS membership package which included a Resolution relating to FRS membership to be approved by TCT’s Board and two accompanying FRS Agreements. On July 30, 2003, Resolution #2003-01, Resolution Relating to Membership into the FRS, was adopted by TCT’s Board. On September 1, 2003, after receiving TCT’s Notice of Employer Identification Number from the Internal Revenue Service on August 27, 2003, Mr. Abety, in his capacity as the president and CEO of TCT, signed the two FRS Agreements. On September 9, 2003, Mr. Abety sent a letter to Ms. Smith enclosing the two FRS Agreements, TCT’s Resolution Relating to Membership into the FRS, and the IRS Notice of Employer Identification Number, fully expecting that FRS coverage would be initiated on October 1, 2003. Mr. Abety again corresponded with Ms. Smith on September 17, 2003, to advise that TCT would make its retirement contributions to FRS by check and asked if FRS preferred bi- weekly or monthly payments. On September 5, TCT entered into the Agreement with TotalSource to provide TCT with payroll, health insurance, life insurance, short and long-term disability insurance, and dental and vision coverage. TotalSource did not provide TCT employees with any retirement benefits. After reviewing TCT’s Agreement with TotalSource, FRS advised TCT on September 23, 2003, that because it appeared the employees covered under the Agreement would be under the control and direction of TotalSource, they were employees of a private company and thus ineligible for FRS benefits. Following Respondent’s denial of participation in FRS, TCT began the process of entering into a new agreement for the provision of personnel services with a vendor other than TotalSource. On February 18, 2004, TCT emailed DOR a new proposed agreement between TCT and AlphaStaff for the provision of payroll, insurance and other human resources services in order to determine if the agreement would permit FRS benefits to begin for TCT employees. On April 20, 2004, FRS determined that the agreement between TCT and AlphaStaff would not bar the workforce of TCT from participating in FRS because AlphaStaff provided only “routine personnel services” to TCT.3 After approving the agreement between TCT and AlphaStaff, DOR accepted TCT as an FRS member effective May 1, 2004. On April 22, 2004, TCT transmitted to DOR the County Ordinance creating TCT, two FRS Agreements, a Resolution Relating to Membership in FRS, TCT’s federal employer tax identification number, and a notification that a fully executed agreement between TCT and AlphaStaff would be forwarded on April 26, 2004. The two FRS Agreements, the Resolution, and the employer tax identification number were identical to those sent to FRS in September 2003. The agreement between TCT and AlphaStaff that had been approved by FRS was fully executed on April 26, 2004. On April 29, 2004, DOR signed and approved the FRS Agreement to commence FRS benefits effective May 1, 2004. Per letter dated May 7, 2004, DOR advised TCT that “since your agency did not qualify for FRS membership until May 1, 2004, past service cannot be purchased prior to the amendment date.” Per letter dated May 27, 2004, Mr. Abety requested the FRS effective date be changed to October 1, 2003. Throughout the period TCT attempted to secure FRS membership. TCT did not participate in any other retirement plan. After being informed in September 2003 that its contract with TotalSource precluded participation in FRS, TCT was engaged in the process of entering into an agreement for personnel services that DOR would find acceptable. On June 23, 2004, TCT received notice of a final agency action from DOR in which DOR rejected TCT’s request to purchase past service and advised TCT of its appeal rights. TCT filed its Petition to review final agency action requesting an evidentiary proceeding on July 15, 2004. Past FRS benefits are being requested for the seven- month period beginning October 1, 2003 and ending May 1, 2004. The 18 TCT employees affected are:4 Modesto E. Abety Lilia R. Abril Emily Cardenas Dwight Danie Robin J. Douglas David C. Freeman Lisete Fuertes K. Lori Hanson Andrea Harris Chareka Hawes Christine Muriel Jeanty Jolie C. Jerry Jean S. Logan Susan B. Marian Eric R. Pinzon Diana Ragbeer Deborah Robinson Margaret L. Santiago The six employees who are vested in the FRS are: Modesto E. Abety Dwight Danie Andrea Harris Jolie C. Jerry Diana Ragbeer Deborah Robinson. TotalSource is a licensed employee leasing company under Part XI of Chapter 468, Florida Statutes. “Employee leasing” is defined by Section 468.520(4), Florida Statutes, as being “. . . an arrangement whereby a leasing company assigns its employees to a client and allocates the direction and control over the leased employees between the leasing company and the client ”5 TCT is referred to as the “client” in the Agreement between TotalSource and TCT. Section (1) of the Agreement, styled “The Parties Relationship,” provides as follows: The parties intend to create an arrangement so that TotalSource, as the Professional Employer Organization (PEO), can provide human resource services to Client. As provided by the Florida legislature, TotalSource shall have sufficient authority so as to maintain a right of direction and control over Worksite Employees (defined in Section 2) assigned to Client’s location, and shall retain the authority to hire, terminate, discipline, and reassign Worksite Employees. Client shall, however, retain sufficient direction and control over the Worksite Employees as is necessary to conduct Client’s business and without which Client would be unable to conduct its business, discharge any fiduciary responsibility that it may have, or comply with an applicable licensure, regulatory, or statutory requirement of Client. Such authority maintained by Client shall include the right to accept or cancel the assignment of any Worksite Employee. Additionally, Client shall have sole and exclusive control over the day to day job duties of Worksite Employees and over the job site at which, or from which, Worksite Employees perform their services. Client expressly absolves TotalSource of liability which results from control over the Worksite Employee’s day-to-day job duties and the job site at which, or from which, Worksite Employees perform their services. Further, Client retains full responsibility for its business products and services, worksite premises, property, and any actions by an third party, contractor, independent contractor or non-Worksite Employee. Client acknowledges that TotalSource has the right to retain and reassign a Worksite Employee who has been terminated by Client. Section 2 of the Agreement, styled “TotalSource Relationship to the Worksite Employees,” provides as follows: The term “Worksite Employees” means individuals hired by TotalSource, assigned to Client’s worksite, after the individuals [have] satisfactorily completed TotalSource pre-employment paperwork [and] background screens as necessary. Client agrees to submit to TotalSource the completed TotalSource pre-employment paperwork no later than two (2) business days after the Client selects the person for employment. The term excludes 1) those employees hired by TotalSource to perform services for TotalSource and not assigned to any Client Worksite (i.e., TotalSource Corporate Employees), and 2) Independent contractors or individuals who may be providing services to Client through any other arrangement entered into solely by Client. TotalSource will notify all Worksite Employees in writing about the PEO arrangement at the beginning and end of this Agreement. During the Agreement, both Client and TotalSource will employ each Worksite Employee. This Agreement does not change the underlying employment relationship between any Worksite Employee and Client that existed prior to or may be created after the Effective Date. Further, this Agreement does not create any rights for any Worksite Employee that did not previously exist (e.g., creating an employment contract with the Worksite Employee). In Section 5(F) of the Agreement, the parties acknowledge that the Client exercises control over the primary terms and conditions of employment for the subject employees. Miguel Masedo was the General Manager for the Southeastern operations for TotalSource when it entered into the Agreement with TCT. Mr. Masedo did not negotiate the Agreement between his company and TCT, but he did sign the Agreement, and he testified as to the manner in which his company operated with TCT. Mr. Masedo’s deposition was admitted as Joint Exhibit 17. On page 22, beginning at line 12, the following Questions from Ms. Arista-Volsky and Answers from Mr. Masedo appear: Q. Okay. Earlier you told me and we discussed that The Trust employees in fact were hired by The Trust before they contracted with your services, correct? A. Yes. Q. So basically when they entered into this contract and were put on the payroll for the purposes of payroll processing, that’s when you make the determination, or you’re saying that they became . . . [sic] A. We actually hired them into ADP TotalSource, they signed new documentation, I-9s, W-4s, they gave us their employment information, so we literally hired them on to ADP TotalSource.[6] On page 23, beginning at line 13, the following Questions from Ms. Arista-Volsky and Answers from Mr. Masedo appear: Q. And the Client Services Agreement did not change the underlying employment relationship between The Trust and its employees; correct? A. What the Client Services Agreement did was it defined us as another employer for these employees, so we are under a co- employment relationship, so certain employment responsibilities would have been the responsibilities of The Trust and would have remained, and other employment responsibilities would have transferred over to ADP TotalSource. TotalSource was the named employer on each employee’s W-2 forms. For each subject employee, TotalSource also paid social security taxes and provided workers’ compensation coverage. TotalSource issued salary warrants to each employee. These payments were to be from funds TCT was required by the Agreement to pay to TotalSource. TotalSource was, by the terms of the Agreement, responsible for the payment of the subject employees even if TCT failed to make its required payments to TotalSource. Although by the terms of the Agreement, TotalSource had legal authority to hire, supervise, and discipline the subject employees, TotalSource rarely exercised those rights in dealing with a client and it did not do so in its dealings with TCT. TotalSource never attempted to control or run the affairs of TCT. It never attempted to exercise any direction or control over Mr. Abety or any other subject employee. TCT initially recruited and hired all of the subject employees. At no time during the period at issue did a TotalSource corporate employee come to the TCT worksite for the purposes of supervising or monitoring the activities of the subject employees. TCT controlled the daily activities of the subject employees at all times relevant to this proceeding. At all times relevant to this proceeding, Mr. Abety and his staff set the terms and conditions of employment for the subject employees and supervised the day-to-day operations of TCT. At no time relevant to this proceeding did Mr. Abety, acting on behalf of TCT, intend for TotalSource to exercise any control over the subject employees. Mr. Abety intended only that TotalSource provide human resources services in the forms of payroll services, worker’s compensation coverage, and a benefits package (excluding a retirement plan). Mr. Abety testified that he did not construe the Agreement as being a contract to lease the subject employees from TotalSource. Based on the findings that follow, it is found that Mr. Abety knew or should have known that he was entering into an employee leasing agreement with TotalSource. As set forth above, in the Agreement, TotalSource refers to itself as a Professional Employer Organization, which is a term for an employee leasing company. The Agreement provides that TotalSource shall have “. . . sufficient authority so as to maintain a right of direction and control over Worksite Employees . . . and shall retain the authority to hire, terminate, discipline, and reassign Worksite Employees. ” Moreover, in the final paragraph of the Agreement, under the heading of “Additional Client Representation” the following appears: “Client understands that, pursuant to Florida law, it may not enter into a PEO (sometimes referred to as an employee leasing) agreement with TotalSource if Client owes a current or prior PEO any money pursuant to any service agreement which existed between that current or prior PEO and Client, or if Client owes a current or prior insurer any premium payments. . . . DOR denied TCT’s request for past service because, under the terms of the Agreement, and Part XI of Chapter 468, Florida Statutes, the subject employees appeared to be employees of TotalSource. In its letter dated June 23, 2004, with the style of “Final Agency Action”, DOR advised Mr. Abety that TCT “. . . joined the FRS effective May 1, 2004 and is ineligible to purchase past service since prior to that date the employees were employed by ADP TotalSource Services, Inc., a private company.” While the Agreement was in effect, the subject employees were employees of both TCT and TotalSource for certain purposes. Under the Agreement between TotalSource and TCT, TotalSource and TCT were dual or joint employers. There was a co-employment relationship. DOR agrees that TCT and TotalSource were co-employers or joint employers. In paragraph 25 of its Proposed Recommended Order, DOR submitted the proposed finding of fact that during the effective dates of the Agreement, the subject employees were “. . . dual or joint employers. There [was] a co-employment arrangement.” In paragraph 53 of its Proposed Recommended Order, DOR proposed the following conclusion of law: 53. However, the totality of the evidence establishes that TotalSource and Children’s Trust are, as Mr. Masedo testified, ‘under a co-employment relationship.’ Children’s Trust and TotalSource were inextricably linked as co-employers, or joint or dual employers. They both shared attributes of being an ‘employer.’ Prior to entering into the Agreement, staff of TCT contacted staff of DOR to inquire what needed to be done for TCT employees to become members of the FRS. DOR staff advised that a membership package would be mailed and that the TCT employees would become part of the FRS after the membership package was processed. For service performed by TCT employees prior to the date TCT became part of the FRS, DOR staff advised that TCT employees could purchase credit for that prior service period if TCT did not participate in another retirement plan. TCT maintains that the information provided by DOR staff that TCT could participate in FRS as long as TCT did not participate in another retirement plan was misleading. TCT further maintains that it detrimentally relied on that misleading information from DOR and that DOR should be estopped to deny the right to purchase credit for the seven-month period at issue in this proceeding. TCT did not disclose to DOR that they were contemplating entering into the Agreement with TotalSource prior to doing so. Consequently, DOR had no reason to discuss with TCT its position that the Agreement would preclude TCT’s membership in FRS. DOR staff gave TCT staff accurate advice based on the information provided to DOR by TCT. TCT would not have executed the Agreement had it known that the terms of the Agreement would disqualify it from membership in FRS. Most of the subject employees were initially recruited by TCT because they were experienced government employees. It was important to TCT from its inception that its employees continue to be eligible for FRS benefits. TCT made diligent efforts to locate a suitable human resources provider to replace TotalSource after it learned from DOR that the terms of the Agreement disqualified the subject employees from membership in FRS. It took TCT almost the entire seven-month period at issue in this proceeding to locate the replacement provider (AlphaStaff).
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order providing that TCT be granted membership in FRS effective October 1, 2003, and that it be permitted to purchase retirement credit for the subject employees for the seven-month period beginning October 1, 2003, and ending April 30, 2004. DONE AND ENTERED this 28th day of April, 2006, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 2006.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint in the manner specified therein and, if so, what penalty should be imposed.
Findings Of Fact Respondent has been a Florida-licensed real estate sales associate since March 19, 1990. He holds license number SL-557575. His license has been in the name of his professional association (Frank Rhoden, P.A.), as allowed by Florida Administrative Code Rule 61J2-1.013(1)(f),4/ since January 11, 2007. At no time during the period that he has been licensed (from March 19, 1990, to present) has he ever been disciplined. Respondent (operating as a professional association) is now, and was at all times material to the instant case, affiliated with All Homes Realty, Inc. (All Homes), a Florida- registered brokerage corporation.5/ Since the late 1970's, Gina Brimmell, a now-retired school teacher,6/ has owned a condominium unit--Unit 305--located at 4311 Crystal Lake Drive, Pompano Beach, Florida (Subject Unit). In or around April 2009, Ms. Brimmell asked a representative of the community association management firm servicing the condominium association to which (by virtue of her ownership of the Subject Unit) she belonged (CAM Firm) to recommend a real estate professional to help her sell or rent the Subject Unit7/ and, in response to her request, was given Respondent's name.8/ Ms. Brimmell, who was then residing in North Carolina, thereafter contacted Respondent and, on April 28, 2009, met with him in person to discuss the possibility of her using him to market the Subject Unit, which at the time was unoccupied and vacant, except for a television and VCR belonging to Ms. Brimmell that she had left behind (on a built-in shelving unit (Shelving Unit)) when she had moved out of the Subject Unit. In introducing himself at the April 28, 2009, meeting, Respondent handed Ms. Brimmell his business card, which indicated that he was working for All Homes. After "interview[ing]" Respondent, an impressed Ms. Brimmell (who was aware of Respondent's affiliation with All Homes and that Respondent was not his own "boss"9/) let Respondent know that she wanted to use his services. Respondent thereupon presented to Ms. Brimmell, for her consideration and signature, the following Property Management Agreement (PMA): PROPERTY MANAGEMENT AGREEMENT: Owner of: 4311 Crystal Lake Drive, #305, Pompano Beach, Fl. 33064 Authorizes Frank Rhoden P.A. To manage, rent and maintain the above property for a fee of 10% of the annual rental and 10% per month of the rent for management services. Frank Rhoden PA will provide electricians, plumbers, painters, and ensure that property is well maintained and rent collected in a timely manner. Owner authorizes the payment of rental fees, management fees, repairs and maintenance out of rent collected. Frank Rhoden PA and Attorney will evict tenants who fail to pay rent in a timely manner, disturb the peace or fail to maintain the excellent condition of the condo as rented. Agreed to By: Owner Frank Rhoden PA After reviewing the PMA, Ms. Brimmell wrote the following handwritten language (Handwritten Addition) underneath the signature lines on the PMA: 10% fee up front to rent (equal to one month's rent) then 10% per month to manage property. Then, Ms. Brimmell and Respondent signed and dated the PMA (on the appropriate signature lines), and they both placed their initials beneath the Handwritten Addition.10/ During their meeting, Ms. Brimmell and Respondent also executed a listing agreement for the sale of the Subject Unit (Listing Agreement).11/ Before the meeting ended, Ms. Brimmell gave Respondent the key to the Subject Unit so that he would be able to show it to prospective buyers and renters. She instructed him to market the unit, which had been cleaned, "as is." At no time did she ask or authorize him to bring and leave any item in the unit, be it for staging the unit or for any other purpose. Respondent was not the only one, aside from Ms. Brimmell, in possession of a key to the Subject Unit. Ms. Brimmell had also given keys to the condominium association and to her good friend, William Russell. Mr. Russell resided year-round in a unit (Unit 309) down the hall from the Subject Unit. Ms. Brimmell had given him a key when she had moved away and asked him to, every now and then, go inside the Subject Unit to make sure nothing was amiss, a responsibility he had agreed to undertake. True to his word, every month or two following Ms. Brimmell's move to North Carolina, Mr. Russell inspected the inside of the Subject Unit. During one such visit on or about June 22, 2009, he observed numerous items in the Subject Unit that had not been there during his last inspection (Unfamiliar Items), including books, paintings, and "knickknacks" on the Shelving Unit; clothing and a suitcase in the unit's walk-in closet; bags, boxes, bins, and containers with various articles in them; and large, blue industrial-looking barrels or drums.12/ Although Mr. Russell did not know it at the time, Respondent was using the Subject Unit to store things (without Ms. Brimmell's knowledge or authorization). Later that same day, Mr. Russell telephoned Ms. Brimmell and told her about the Unfamiliar Items he had found in the Subject Unit, commenting that it looked like someone had moved in to the unit. Two days later, he went back into the Subject Unit, took digital photographs of the Unfamiliar Items, and electronically sent these photographs to Ms. Brimmell. After viewing the photographs, Ms. Brimmell telephoned the CAM Firm, All Homes,13/ and Respondent to find out what, if anything, they knew about the Unfamiliar Items' presence in the Subject Unit. Ms. Brimmell was unable to reach Respondent, so she left messages for him. After a time, Respondent called her back and spoke to her. During their discussion, Respondent admitted to Ms. Brimmell that he was "storing stuff" in the Subject Unit, and he apologized to her for doing so. Ms. Brimmell, who was "extremely upset," advised Respondent that she was terminating the PMA and the Listing Agreement (neither of which had produced the result Ms. Brimmell had hoped for--rental of the Subject Unit in the case of the PMA, and sale of the Subject Unit in the case of the Listing Agreement), and she demanded that he return the key to the Subject Unit she had given him. Some time shortly after Respondent's and Ms. Brimmell's telephone conversation, the Unfamiliar Items were removed from the Subject Unit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Florida Real Estate Commission issue a Final Order (1) finding that, as alleged in Count Two of The Administrative Complaint, "Respondent violated [s]ection 475.25(1)(b), Florida Statutes, when Respondent moved personal property into the [Subject Unit]" and disciplining him therefor by fining him $1,500.00, suspending his license for a period of six months, and directing him to pay, pursuant to section 455.227(3)(a), investigative and non-attorney prosecutorial costs related to this violation in an appropriate amount to be determined in accordance with chapter 120; and (2) dismissing the remaining allegations of professional misconduct made in the Administrative Complaint. DONE AND ENTERED this 2nd day of May, 2012, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 2nd day of May, 2012.
