The Issue Whether Respondent Homes-R-Us, Inc.'s license as a corporate real estate broker, Respondent Vera McWeeney's license as a real estate broker, and Respondent Anthony Cutrona's license as a real estate salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint dated September 3, 1981. The Administrative Complaint herein alleges that the Respondents utilized a contract form in their business of negotiating rentals and furnishing information to prospective tenants which did not conform to Rule 2IV-10.30, Florida Administrative Code, therefore being in violation of various provisions of Chapter 475, Florida Statutes. The Complaint also alleges that Respondents employed various persons to conduct the business who were not licensed by Petitioner, and who were paid compensation, in violation of various provisions of Chapter 475, Florida Statutes. At the commencement of the hearing, the parties stipulated to the facts set forth in Paragraphs 2-4 of the Administrative Complaint, and that Respondents, in their business of furnishing rental information to prospective tenants for a fee, utilized a contract form which did not conform to Rule 2IV-10.30, Florida Administrative Code. As to Count II, the parties stipulated that during the times alleged in the Administrative Complaint, the corporate Respondent employed unlicensed personnel who performed certain activities, to include (1) acceptance of a rental fee provided in the contract, (2) receipting of the rental contract, delivery to the prospective customer of the "vacancy book" containing available rental properties, and (4) verifying the availability of various rental properties after selection by the customer by telephoning the prospective lessor of the property. Respondents Anthony R. Cutrona and Vera McWeeney testified at the hearing, and Petitioner called its investigator, Francis A. Maye, and a former investigator, Debbie J. Minutoli, as witnesses. Petitioner submitted eight exhibits in evidence and Respondent submitted one exhibit.
Findings Of Fact Respondent Homes-R-Us, Inc. is now, and was at all times relevant to the matters alleged in the Administrative Complaint, licensed as a corporate real estate broker, License No. 0212520, at 9000A North Florida Avenue, Tampa, Florida. (Stipulation) Respondent Vera McWeeney is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate broker, License Nos. MI4 0058950 and MI4 021252, and the active firm member and officer of Homes-R-Us, Inc. (Stipulation) Respondent Anthony R. Cutrona is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate salesman for Homes-R-Us, Inc., with License No. MI4 0328427. (Stipulation) Homes-R-Us, Inc. is a firm that solicits or otherwise receives from prospective lessors of residential property, information about such rentals which is then placed in a book and provided to prospective tenants who pay a fee to the firm in order to locate appropriate rental property. The firm advertises such available rentals in newspapers and secures customers in this manner. No fee is charged to the owner or prospective lessor of the property. The normal procedure employed by the firm is to receive payment of the fee from a customer, permit the customer to select any suitable properties from the descriptive information, and then seek telephonic confirmation of the continuing availability of the selected properties. The customer then proceeds to visit the property or otherwise contact the owner and negotiate a rental, if desired. If unsuccessful or unsatisfied with the properties, the customer can continue to avail himself of the "listings" maintained by Homes-R-Us, Inc. for a period of three months on a daily basis. (Testimony of Cutrona, Stipulation, Petitioner's Exhibits 2-3, 8) Respondent Cutrona has been the general manager of Homes-R-Us, Inc. since it was established in November, 1979. Respondent McWeeney was obtained as the firm broker on a gratuitous basis to supervise the activities of the firm. A form contract is used between Homes-R-Us, Inc. and the customer at the time the fee is paid by the customer to obtain rental information. The form was designed by Cutrona when the firm commenced business and was approved by McWeeney. The contract contained a provision that purportedly was included pursuant to law that read in part "If you do not obtain a rental, you are entitled to receive a return of 26 percent of the fee paid, if you make demand within 30 days of this contract date". Respondents used the figure of 26 percent for refund purposes based upon their interpretations of the requirements of Subsection 475.453(1), Florida Statutes. They were not aware of the fact that Petitioner's Rule 21V-10.30, Florida Administrative Code, (formerly Rule 21V-10.15) provided that such contracts should provide for a refund of 75 percent of the fee. Accordingly, the contract form was in violation of the applicable rule. (Testimony of Cutrona, McWeeney, Petitioner's Exhibits 2-3, Respondents' Exhibit 1) At the time Homes-R-Us, Inc. commenced business, in November, 1979, Respondent McWeeney was the only licensed employee in the firm. Cutrona received his license as a salesman in January, 1980. During the period February to August, 1980, the firm employed another licensed real estate salesman, but during the period from August to November 21, 1980, Respondents were the only licensed personnel. On the latter date, an employee, Brenda Serino, received her license as a real estate salesman. A branch office in Tampa had been opened in the spring of 1980, and Cutrona spent one day a week in that office. He was at the original Largo office during the other six days of the week. Respondent McWeeney periodically visited the office and kept in touch with activities by telephone communications. (Testimony of Cutrona) On November 10, 1980, Deborah Minutoli, an investigator for Petitioner, visited Respondents' office in an "undercover" capacity. Her investigation was prompted by several complaints that had been filed against the firm. She posed as a customer, signed the contract and paid a $45 fee to look through their listing book. She dealt with Brenda Serino, who was at that time an unlicensed employee of Homes-R-Us, Inc. Ms. Serino signed the contract on behalf of the Respondent firm. Ms. Minutoli told the employee that she was looking for a one- bedroom or efficiency-type, apartment and could pay about $180 rent per month. Ms. Serino explained a sample listing in the book and the type of information included in the listings. Ms. Minutoli then looked through the book and found five listings which she wrote on a piece of paper and gave to Ms. Serino. Several persons in the office, including Respondent Cutrona, made telephone calls to verify the listings, but only one person was able to be contacted at that time. An employee, Jackie Mourey, then presented Ms. Minutoli with a form showing the five rentals with addresses, telephone numbers, and rental prices, which both signed. The form also included a sixth rental which Ms. Mourey said was a new listing that had just come in and had not been placed in the book as yet, but since it was within the requested price range and location, it was placed on the form. Ms. Minutoli departed from the office and several days later examined one of the rental properties, drove past the other ones and returned to Respondents' office the following day. At this time, she requested that her fee be returned because the properties were unsatisfactory. Respondent Cutrona urged her to continue using the service, but gave her an "adjustment form" to fill out and told her that they would decide whether or not a refund was in order. She subsequently attempted to reach Cutrona by telephone, but was unsuccessful on several occasions. On November 21st, she spoke to him over the phone and he suggested that she fill out the "adjustment form". On November 24th, she, together with investigator Greg Clift, went to Respondents' office and gave the "adjustment form" to Cutrona, but he declined to make the refund. Subsequently, during the same month, Ms. Minutoli, together with another of Petitioner's investigators, Francis Maye, went back to Respondents' office. Maye posed as her uncle and again they sought a refund of the fee which had previously been paid, but again were unsuccessful. (Testimony of Minutoli, Maye, Petitioner's Exhibits 2-7) Investigator Maye had previously talked to Respondent Cutrona's wife at one of the offices concerning a refund complaint from another customer. At that time a refund was made in full. Maye had a conversation with Respondent Cutrona on November 25, 1980 concerning the percentage of fees payable to a customer on a refund. According to Cutrona, Maye questioned the use of a 26 percent refund amount, and told Cutrona he would get back to him later and verify the correct percentage of any refund, but never did so. Cutrona's testimony in this respect is considered credible. During the conversation, Maye did not advise Cutrona to cease using the 26 percent figure or to revise the contract form. Cutrona later talked to another employee of Petitioner who convinced him that Petitioner's regulations required a 75 percent refund and the firm thereupon revised its form to reflect the correct percentage. Investigator Maye also spoke to Respondent McWeeney in November, 1980 concerning the "seven services of real estate" and what services could be performed by unlicensed personnel in the rental office, but did not inform her concerning any suspected irregularities in the operation of Homes-R-Us, Inc. (Testimony of Maye, Cutrona, McWeeney) Respondents' employees were mostly part-time help who were compensated on an hourly basis, and it was therefore difficult to obtain licensed personnel who would remain with the firm. The clerical personnel do not provide any information to customers regarding leasing arrangements, but do receive listings called in to the office by landlords. Only licensed personnel solicit listings from prospective lessors, or owners of property. Additionally, unlicensed clerical personnel accept rental fees, prepare rental contracts, deliver the "vacancy book" to customers, and verify rental availabilities by telephone to the prospective lessors. (Testimony of Cutrona, Stipulation)
Recommendation That an administrative fine of $250.00 be imposed against Respondent Homes- R-Us, Inc., and that a public reprimand be issued to Respondent Vera McWeeney and Anthony Cutrona for violation of Subsection 475.25(1)(e), Florida Statutes. DONE and ENTERED this 25th day of February, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1982. COPIES FURNISHED: Salvatore A. Carpino, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph R. Park, Esquire 33 North Ft. Harrison Avenue Clearwater, Florida 33515 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick H. Wilsen Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues are as follows: (a) whether Respondent failed to make documents available to Petitioner in violation of Section 475.5015, Florida Statutes; (b) whether Respondent obstructed or hindered the enforcement of Chapter 475, Florida Statutes, or hindered the performance of any person acting under the authority of that chapter in violation of Sections 475.25(1)(e) and 475.42(1)(i), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
Findings Of Fact Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida. Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it in 1999. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc. On or about September 11, 1998, Harper Fields, Esquire, filed a complaint with Petitioner. The complaint alleged that Respondent had mismanaged his wife's rental property pursuant to a property management agreement. The complaint resulted in an investigation and subsequent Administrative Complaint in DBPR Case No. 98-83963. That case became the subject of the Recommended Order in DOAH 02-2720PL, entered contemporaneously with the Recommended Order in the instant case. By letter dated November 25, 1998, Petitioner informed Respondent that Mr. Fields had filed a complaint against her. The letter stated that Petitioner's investigator, Sidney Miller, would be in contact with Respondent to discuss the complaint in detail. Respondent sent Mr. Miller a letter dated December 20, 1998. In the letter, Respondent attempted to explain her involvement in the management of the rental property owned by Mrs. Paula Fields. During the investigation of the complaint, Mr. Miller requested Respondent to furnish him all documentation related to the management of Mrs. Field's rental property. The initial request included documentation about the transaction for the months of February through April 1998, including, but not limited to, monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts and copies of supporting checks, deposits slips, and transfers. Soon thereafter, Respondent furnished Mr. Miller with some of the requested information. However, Respondent never provided Mr. Miller with a copy of the property management agreement at issue in DOAH Case No. 02-2720PL. Mr. Miller also requested information regarding any background check that Respondent conducted before renting Mrs. Field's property to Donnda Williams. Respondent provided this information to Mr. Miller under cover of a letter received by Mr. Miller on June 16, 1999. Mr. Miller's review of Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occur in an account than a corresponding bank statement. Mr. Miller also discerned that Respondent transferred $1,000 from her rental escrow account to her operating account on February 10, 1998. Additionally, Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances; but her March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20. Respondent transferred $1,000 on March 2, 1998, and $8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative balance on Respondent's monthly statement reconciliation for her rental escrow account. Mr. Miller addressed his concerns relating to Respondent's rental escrow account in writing on June 25, 1999, and verbally on June 29, 1999. Mr. Miller requested Respondent to explain the March 1998 transfers and the negative balances reflected in the monthly statement reconciliations for the rental escrow account in the months of February through April 1998. Mr. Miller's June 25, 1998, letter requested additional information, stating as follows: I will also need the deposit slips and reconciliation for the rental escrow account for January 1998 along with copies of the bank statements, reconiliation's [sic] and deposits slips for any other account you maintained in January 1998. In addition please provide me with copies of the reconciliation's [sic] for the escrow account and the rental escrow account from May 1998 through the month you closed these accounts. If you maintained any other real estate escrow accounts for the period of January 1998 to this date, provide me with the same information. Respondent received Mr. Miller's June 25, 1999, letter. However, she hired an attorney and forwarded to him the records that she believed were responsive to Mr. Miller's request. Mr. Miller did not learn that Respondent had hired an attorney until he talked to her on June 29, 1999. On or about June 29, 1999, Petitioner explained to Mr. Miller that she had been in the State of Washington caring for a sick relative during parts of January, February, and March 1998. She did not have her rental escrow account checkbook with her when disbursements were due from that account. Therefore, Respondent made the disbursements from her operating account. She made the transfers from her rental escrow account to her operating account to facilitate making the payments in this manner. Upon learning that counsel represented Respondent, Mr. Miller contacted the attorney by telephone. The purpose of the call, in part, was to request the attorney to file a letter of representation. Because the attorney was unavailable, Mr. Miller left a message requesting the attorney to return the call. The attorney did not respond to the message. After not receiving any further information from Respondent or her attorney, Mr. Miller sent Respondent a letter dated November 1, 1999. The letter requested the status of the records requested in Mr. Miller's June 25, 1999, letter. Respondent received the November 1, 1999, and forwarded it to her attorney. In a letter dated November 29, 1999, Respondent's attorney acknowledged that he had received Mr. Miller's November 1, 1999, letter. The attorney stated that he had instructed Respondent to furnish Mr. Miller with copies of the cashed checks for the two transfers that Mr. Miller was inquiring about. The November 29, 1999, letter from Respondent's attorney did not otherwise address the information requested by Mr. Miller's June 25, 1999, letter. In correspondence dated January 22, 2000, Respondent's attorney explained that Respondent had issued the attached copies of checks while she was in the State of Washington during her father's illness only to avoid delay in payment. Attached to the letter were copies of checks, front and back, of Respondent's operating account for her business, Park Avenue Properties, Inc. The copies of checks were issued in February through April 1998. Respondent had furnished Mr. Miller with copies of these checks in June 1999. The January 22, 2000, letter from Respondent's attorney was otherwise not responsive to Mr. Miller's June 25, 1999, letter. Specifically, there were no copies of deposit slips and reconciliation for the rental escrow account for January 1998. There were no documents or reference to the same information for any other accounts that Respondent maintained in 1998. There were no copies of the reconciliations for the rental escrow account from May 1998 through January or February 1999 when Respondent closed her accounts. During the hearing, Respondent admitted that the information furnished to Mr. Miller under cover of the January 22, 2000, letter was not responsive to the request in Mr. Miller's June 25, 1999, letter. At no time during the investigation did Respondent explain that the documents reflected paid personal expenses, as well as expenses paid on behalf of clients out of the same account. In a letter dated April 6, 2000, Mr. Miller sent yet another request for records and information to Respondent's attorney. This letter requested an explanation regarding certain transfers between Respondent's accounts on March 6, April 6, and April 14, 1998. Mr. Miller needed copies of the cancelled checks and better copies of the bank statement for January 1998 for the rental escrow account. Mr. Miller also requested the bank statements, reconciliations, deposit slips and cancelled checks for the rental escrow, and operating accounts for February 1998. The April 6, 2000, letter again requested information previously requested in June 1999. This information included the following: (a) deposit slips for the rental escrow account in January 1998, along with copies of the bank statements, reconciliations, and deposit slips for any other accounts that Respondent maintained in January 1998; (b) copies of the reconciliations for the operating account and the rental escrow account from May 1998 through the month that Respondent closed the accounts; and (c) the same information for any other real estate escrow accounts that Respondent maintained from January 1998 to June 25, 1999. Mr. Miller's April 6, 2000, letter was sent to Respondent's attorney by certified mail. The return receipt indicates that the attorney's office received the letter on April 10, 2000. In a letter dated October 26, 2000, Respondent's attorney sent Petitioner's counsel a letter. According to the letter, Respondent had provided copies of all the checks and the explanation behind the transactions. The letter states that the attorney had not heard from Mr. Miller after the attorney sent the January 2000 letter. On or about June 3, 2002, Respondent's attorney sent Petitioner's counsel some 351 pages of documents, indicating that they included all documents requested by Mr. Miller and that they were responsive to all discovery requests. However, clear and convincing evidence indicates that the documents were not responsive to Mr. Miller's June 25, 1999, and April 6, 2000, record requests. During the hearing, Respondent agreed that the documents were not responsive to Mr. Miller's requests for records related to Respondent's rental escrow account from May 1998 through the time she closed the account. Because Mr. Miller was unable to review the records he requested, he was unable to perform an audit of Respondent's accounts. Mr. Miller needed records covering a six-month period in order to audit Respondent's accounts. Without the records, Mr. Miller was unable to determine whether problems in Respondent's rental escrow account occurred at other times. Respondent testified during the hearing that she had provided Mr. Miller with all of the records in her possession. Her testimony in this regard is not persuasive. Respondent admitted that Chapter 475, Florida Statutes, required her to keep all of her records for four or five years. The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Department of Business and Professional Regulation, Division of Real Estate, enter a final order revoking Respondent's license. DONE AND ENTERED this 15th day of November, 2002, in Tallahassee, Leon County, Florida. 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 15th day of November, 2002. COPIES FURNISHED: Kenneth D. Cooper, Esquire 400 Southeast Eighth Street Fort Lauderdale, Florida 33316 Stacy N. Robinson Pierce, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N308 Orlando, Florida 32801-1772 Buddy Johnson, Director Nancy P. Campiglia, Chief Attorney Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The Department adopts and incorporates in this Final Order the Statement of the Issues in the Recommended Order. The Department's exceptions to the Statement of the Issues in the Recommended Order are not material and are therefore withdrawn.
Findings Of Fact Kjell Bergh operates a Volvo dealership in Minnesota. He also has other business interest in the United States and abroad. In 1986, he received approval from Volvo to open a Volvo dealership in the area of Boca Raton, Florida. Boca Raton zoning makes it very difficult to locate automobile dealerships there. Mr. Bergh therefore located a suitable five acre site to build the Volvo dealership in nearby Delray Beach, Florida. The property was purchased in 1987 solely to build the automobile dealership on it. At some point Mr. Bergh also received a Volkswagen franchise, and operates both the Volvo and the Volkswagen franchises on the Delray Beach property. Title to the land was taken individually in the names of Kjell and his wife Mary Bergh, as joint tenants, on the advice of their tax counsel. The purchase price for the land was approximately one million dollars. The automobile dealership is operated by Borton Motors Incorporated, a Florida corporation organized in 1986. It is owned 75 percent by the Petitioners, Kjell and Mary Bergh, and 25 percent by the vice president and general manager, Loren Sheffer, who has also invested money in the dealership. It is common in the automobile industry for local managers to have a personal stake in automobile dealerships they manage for absentee owners. The manager, however, has only a minority interest, and the automobile manufacturer, Volvo, holds Mr. Bergh responsible for the operation of the dealership. The Berghs financed the purchase of the land and the buildings used as the automobile dealership facilities through the Barnett Bank of Palm Beach County. On July 23, 1987, the Berghs executed a note and mortgage for $2,000,000 in favor of the Barnett Bank for the purchase of the property along with a construction loan agreement to build the dealership facility. The rate and mortgage were modified to increase the amount borrowed to $2,250,000 in May and June of 1988. The land was then leased to Borton Motors, Inc., the legal entity which operated the automobile dealerships. As a condition of obtaining the loan from Barnett Bank, the bank required that Borton Motors, Inc., guarantee the loan which the bank had made to Mr. and Mrs. Bergh, and also required the Berghs to assign the lease to Barnett Bank. The terms of the mortgage give Barnett Bank the right to collect rents and other payments from the property, and prohibits the termination or cancellation of the lease without Barnett's permission. Barnett Bank had the right to approve the lease provisions and to set the amount of the rent so that the debt service coverage ratio would be no less than 1.2 times the amount borrowed. In connection with the loan by Barnett Bank, on July 27, 1987, Borton Motors, Inc., gave to Barnett Bank "its continuing and unconditional guarantee of the payment in full when due of any and all indebtedness of Debtor [Kjell and Mary Bergh] to Bank to the same extent as if Guarantor [Borton Motors, Inc.] were the principal debtor of the indebtedness" (Exhibit 1D). From the inception of the transaction, it was intended that the entity operating the automobile dealership, Borton Motors, Inc., would finance the purchase of the real estate on which the automobile dealership would be located, and the construction of necessary improvements. This was accomplished through the rental payments Borton Motors, Inc., would make to the Berghs, who had actually taken title to the land. Through its guarantee, Borton Motors, Inc., was as liable to Barnett Bank as were the Berghs, from the inception of the loan. The Berghs hoped to receive a return on monies they invested in the automobile dealership, whether for real estate, improvements to the real estate, inventory in the form of cars, or parts, or for payments made for labor to its sales force and service technicians. It is misleading to state that the Berghs intended to receive a return on the real estate investment they made. The return on the real estate is not the result of a separate investment made by the Berghs, it is instead a part of the overall operation of the dealership. The Berghs are not investors in real property who happened to lease property to a tenant who happens to operate a automobile dealership on that property. The Berghs do take a federal income tax deduction for interest paid on the note to Barnett Bank and report the rent received from Borton Motors, Inc., as income on their federal income tax returns. Petitioners have acquired other debt on behalf of the corporation and do not receive any money from the corporation over and above the amount of the mortgage and other indebitness. The Barnett Bank of Palm Beach County eventually sold its loan to the Berghs to Volvo Finance North American, Inc., in late April 1992. This sale has no effect on the taxation of the transaction of issue. On February 8, 1991, the Department of Revenue sent to the Petitioners a form requesting them to file a "application for Sales and Use Tax Registration" and asking them to report the rental income they had received from Borton Motors, Inc., on the dealership property for the period February 1986 through February 1991. The Berghs filed the application and supplied the rental figures to the Department, but maintained no tax was due because the "amount paid reflects the actual debt service." The Department sent the Berghs a Notice of Assessment on February 28, 1991, stating that they owed $71,043.29 in tax, penalties and interest, representing a sales tax at the rate of 6 percent upon the lease payments they had received from Borton Motors, plus penalties and interest. The Department also gave them notice of a right to protest the assessment. The Berghs did protest the assessment to the Department's Bureau of Hearings and Appeals, which sustained the assessment, but agreed to reduce the penalty involved. The Berghs paid $7,043.50 plus interest of $2,327.98 which represents the amount of payments from Borton Motors, Inc., in excess of the debt service due to Barnett Bank.
Recommendation Based on the foregoing, it is recommended that a final order be entered withdrawing the assessment of tax. DONE AND ENTERED this 28th day of September, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2106 The following constitutes my rulings pursuant to Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-19. Adopted, though not verbatim. Respondent's Proposed Findings: 1. Accepted, excepted for last sentence which is rejected as unsupported by weight of the evidence. 2.-6. Adopted. Subordinate to hearing officer findings on this point. 8.-10. Accepted, but not verbatim. COPIES FURNISHED: Cynthia S. Tunnicliff Carlton, Fields, Ward, Emmanuel, Smith & Cutler P.A. Post Office Drawer 190 Tallahassee, Florida 32302 Mark T. Aliff, Esquire Assistant Attorney General Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Respondent, Deborah Lynn Tengzelius (Tengzelius), was at all time material hereto a licensed real estate broker in the State of Florida, having been issued license number 0229363. Tengzelius was the qualifying broker for Respondent, The Rental Center, Inc. (Rental Center), a corporation licensed as a real estate broker in the State of Florida under license number 0229362. Respondents are, inter alia, engaged in the business of providing rental information for a fee. Consequently, in October 1983, pursuant to the requirements of Rule 21V-10.30, Florida Administrative Code, Respondents forwarded to the Petitioner, Department of Professional Regulation, Division of Real Estate (Department), a copy of their proposed rental information agreement. By letter of October 31, 1983, the Department returned Respondent's proposed agreement with instructions to correct certain provisions to bring it into compliance with Section 475.453, Florida Statutes. Respondents made the necessary changes, and by letter of November 15, 1983, the Department advised them that their agreement now appeared to comply with the rules and regulations of the Florida Real Estate Commission. On August 22, 1985, Tengzelius, on behalf of the Rental Center, executed its standard rental information agreement with Elizabeth Wilson (Wilson) in exchange for a fee of $60.00. That agreement, previously approved by the Department, provided in part: NOTICE: Pursuant to Florida law, if the rental information provided under this contract is not current or accurate in any material aspect you nay demand within thirty (30) days of this contract date a return of your full fee paid. If you do not obtain a rental you are entitled to receive a return of seventy-five (75 percent) percent of the fee paid if you make a demand within thirty (30) days of this contract date. CLIENT COMMITMENT As a prospective Tenant, I hereby agree: 1. To make any refund request within 30 days following above date, in writing, and delivered to The Rental Center, Inc. .... (Emphasis added). In mid-September, less than 30 days after the rental information agreement was signed, Wilson telephoned the Rental Center and requested a return of the fee she had paid. Wilson averred that she was not able to obtain a rental. Respondents refused to return 75 percent of the fee because Wilson's request was not in writing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the administrative complaint be DISMISSED with prejudice. DONE AND ORDERED this 10th day of February, 1987, in Tallahassee, Florida. WILLIAM J. KENDRICK 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 February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3776 Respondents submitted an unnumbered 13 paragraph memorandum of law and facts". These paragraphs have been number 1-13 and addressed as follows: Addressed in paragraph 4. Addressed in paragraph 3. 3-4. Addressed in conclusions of law. 5-7. Addressed in paragraph 2. 8-13. Addressed in conclusions of law if pertinent. Respondent's suggestion that the doctrine of entrapment is applicable to the facts of this case is ill-founded. See: Thomas v. State, 243 So.2d 200 (Fla. 2d DCA 1971). COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 C. Michael Shalloway, Esquire 909 North Dixie Highway West Palm Beach, Florida 33401 Harold Huff, Executive Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings Benton, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues are whether Respondent is guilty of issuing checks from his escrow account without sufficient funds so as to constitute culpable negligence, breach of trust, misrepresentation, or concealment, in violation of Section 475.25(1)(b), Florida Statutes; failing to reconcile escrow accounts, in violation of Section 475.25(1)(e) and (k), Florida Statutes, and Rule 61J2-14.012, Florida Administrative Code; employing an unlicensed person, in violation of Section 475.42(1)(c), Florida Statutes; failing to maintain business records, in violation of Section 475.5015, Florida Statutes; and violating a lawful order of the Florida Real Estate Commission by failing to pay a citation within the required time, in violation of Section 475.25(1)(e), Florida Statutes. If Respondent is guilty of any of these allegations, an additional issue is the penalty that should be imposed.
Findings Of Fact Respondent became a licensed real estate salesperson in 1987. The following year, he became a licensed real estate broker, and he has remained a broker continuously since that time. From September 30, 1996, through January 30, 2000, Respondent was the qualifying broker of Express Realty and Investments, Inc. (Express Realty). At no time relevant to this case was Novellete Faye Hanse a Florida-licensed real estate broker or real estate salesperson. At all relevant times, Ms. Hanse was the office manager of Express Realty. Respondent formed Express Realty in 1995. Respondent was the sole director and president. Ms. Hanse's son was an officer of Express Realty from the time of its formation. Respondent met Ms. Hanse in 1991. She informed Respondent that she was a licensed mortgage broker. Respondent and Ms. Hanse agreed in late 1991 to form a joint real estate/mortgage broker operation in a single office. However, when Hurricane Andrew struck in 1992, Respondent, who has been a licensed general contractor since 1978, engaged exclusively in construction until 1995. Respondent formed Express Realty to pursue the prior plan of a joint real estate/mortgage broker operation. The two businesses occupied an office building owned by Ms. Hanse, who did not charge Respondent's business any rent. The address was 6306 Pembroke Road in Miramar. Express Realty served as an escrow agent in a contract dated May 9, 1999, for the sale and purchase of real property located at 6360 Southwest 23rd Street in Miramar. In this capacity, Express Realty, held various funds in escrow for the closing. For the closing, Express Realty issued two checks payable to the closing agent, totaling $19,169.08, and drawn on its escrow account. The checks, which are dated July 15, 1999, and signed by Ms. Hanse, bear the name, "Express Realty & Investments, Inc. Escrow Account" and bear the address 6306 Pembroke Road in Miramar. The bank failed to pay these checks due to insufficient funds. After receiving a complaint that Express Realty had failed to produce these escrow funds at the closing, Petitioner's investigator conducted an audit of Respondent's escrow account. At the audit, which took place the day prior to the day scheduled, the investigator found Ms. Hanse, but not Respondent, at the Express Realty office. Despite repeated requests on and after the day of the office visit, the investigator could not obtain relevant records from Ms. Hanse or Respondent concerning the real estate transaction for which Express Realty had issued escrow checks with insufficient funds. On August 23, 1999, the Florida Real Estate Commission issued a citation to Respondent at 6306 Pembroke Road in Miramar. The citation was served on Respondent within one week of the date of issuance. The $100-citation was for the failure to give the required disclosure or notice in a real estate transaction. The citation gave Respondent 30 days to contest the citation or 60 days to pay the citation. After the deadline, the investigator contacted Respondent and asked him about the citation. Respondent stated that he had forgotten about it. When Respondent still failed to pay the citation, the investigator called again, and Respondent stated that he had mailed the money, but it had been returned due to a faulty address. Respondent paid the citation approximately four months after it had been served on him. Shortly after Respondent belatedly paid the citation, Petitioner received another complaint concerning a contract for the sale and purchase of real property located at 850 Southwest 9th Avenue in Hallandale. In this transaction, Ms. Hanse represented herself to be a licensed real estate broker, showed the property to prospects, and accepted $5000 in escrow on behalf of Express Realty. In July 2000, Petitioner's investigator conducted an audit of Express Realty's escrow account. Again, the investigator was unable to find any documents by which he could undertake an independent reconciliation of the account or otherwise document the role of Express Realty in the subject transaction. At the hearing, Respondent claimed that he was unaware that Ms. Hanse had been conducting real estate business without his authority in the name of Express Realty. Although he admitted that she was an employee of Express Realty, he disclaimed any knowledge that she had removed him from the escrow account and otherwise taken over the management of the real estate broker company. However, Respondent could not explain why, after his claimed discovery of these misdeeds in the summer of 1999, he did nothing to prevent Ms. Hanse from continuing to use Express Realty as the means by which to conduct unlicensed real estate activities, as she did a few months later. Under the circumstances, Petitioner proved that Respondent was at all times aware that Ms. Hanse was conducting unlicensed real estate activities through Express Realty.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of the allegations contained in Counts I-IV and VI of the Amended Administrative Complaint, imposing a $5000 administrative fine, and suspending his license for three years; provided, however, if Respondent fails to pay the fine in full within 180 days of the final order, his license shall be revoked without further notice. DONE AND ENTERED this 9th day of July, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 9th day of July, 2002. COPIES FURNISHED: Jack Hisey, Deputy Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Dean Saunders, Chairperson Florida Real Estate Commission Division of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Juana Carstarphen Watkins Senior Attorney Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 Wayne Wagie 11900 North Bayshore Drive, Unit No. 5 Miami, Florida 33181
Findings Of Fact The Respondent, M. Betty Murray, currently holds Florida Real Estate Broker's License number 62943. At all times material to this proceeding, the license was in full force and effect. The Respondent represented L. O. Huckaby and Sarah Huckaby in the sale of property located at 363 Boylston Avenue, Daytona Beach, Florida, to Elizabeth T. Stein, the complainant in this proceeding. Pursuant to her representation of the Huckaby's, the Respondent, on or about June 18, 1979, prepared a proposed contract for the sale and purchase of the subject property. Prior to signing the contract and tendering a deposit thereunder, Ms. Stein reviewed the contract with her attorney, Berrien Becks, Sr. When reviewing the contract with Mr. Becks, Ms. Stein failed to inform either Mr. Becks or his secretary, Sylvia Van De Mark, that she intended to use the property as either a duplex or a triplex. Had Ms. Stein indicated such an intent, a provision to that effect would have been included in paragraph VIII of the contract for sale and purchase. This was the normal procedure utilized in the ordinary course of business by the Becks' law firm. The contract for sale, Respondents Exhibit 1, shows no such provision or notation. The sellers, Mr. and Mrs. Huckaby, were represented by Charles E. Booth, Esquire. On behalf of Ms. Stein, Mr. Becks requested that certain repairs be made to the property. Mr. Booth rejected these demands by letter dated July 24, 1979. Although the contract does not state that the property was intended to be used as a duplex, the property is in fact recognized as a de facto duplex under the nonconforming use provisions of the city's zoning ordinance. Had Ms. Stein elected to proceed with the sale, she would have been permitted to utilize the property as a two unit property so long as she lived in one of the units which was her expressed intent. Prior to paying the balance of the deposit due on the contract, Ms. Stein and the Respondent went to Mr. Booth's office where Mr. Booth confirmed by telephone conversation with city officials and in the presence of both Ms. Stein and the Respondent, the lawful use of the property as a single family residence with attached rental unit. Following this information, Ms. Stein paid the balance into the Respondent's escrow account. On August 20, 1979, Ms. Stein demanded return of the $9,000.00 deposit from the Respondent. Upon receipt of this demand, the Respondent contacted Mr. Booth who instructed her to retain the deposit in her escrow account. Mr. Booth and Mr. Becks negotiated a release which was signed by the Sellers on August 28, 1979 and by Ms. Stein on September 11, 1979. The release authorized disbursements to be made including $500.00 to the Respondent, $150.00 to Mr. Booth, $43.00 to Lawyers Title Services, Inc. and the remaining $8,307.00 to Ms. Stein. On August 20, 1979, prior to signing the release, Ms. Stein sent a complaint to the Board concerning the return of her $9,000.00. On September 7, 1979, Ms. Stein sent another letter to the Board indicating that she had not agreed to the disbursements set forth in paragraph 8 above notwithstanding her agreement to sign the release. Ms. Stein's attorney, Mr. Becks, witnessed the release and explained the legal implications of the release in detail to her prior to her signing. Mr. Stein did not inform Mr. Becks of her correspondence with the Board which attempted to disclaim the release. At no time did the Respondent represent the property as a triplex, but only as a single family residence with a single attached rental unit, which was a permissible use under the city zoning ordinance. In fact, Ms. Stein defaulted on the contract and under its express terms could have forfeited the entire $9,000.00. The release negotiated between Mr. Becks and Mr. Booth which returned $8,307.00 to Ms. Stein was generous and demonstrated good faith efforts on the part of the Sellers to settle this matter amicably. The Respondent has maintained her registered office at 231 Gradview, Daytona Beach, Florida. The office consists of a room where she maintains her business files and which can be closed for privacy. The allegations of Ms. Stein against the Respondent were untrue and were made with knowledge that neither the Huckaby's nor the Respondent had engaged in any illegal or unethical activities regarding this transactions. The testimony of Mr. Becks, attorney for Ms. Stein and the affidavit of Mr. Booth, attorney for the Huckaby's, corroborates the Respondent's testimony and contradicts the allegations made in the complaint filed by Ms. Stein and the administrative complaint filed by the Board which was based entirely upon Ms. Stein's allegations. Ms. Stein's failure to appear at the final hearing supports the conclusion that she knew the allegations made by her could not be proved at the hearing. Any equitable or legal rights which Ms. Stein may have had to pursue this matter ended when she knowingly and voluntarily signed a release in order to secure the return of a substantial portion of her deposit monies. In effect, the only misrepresentation in this case was that made by Ms. Stein when she represented that the release would extinguish all responsibilities, obligations and rights arising from the contract in return for the $8,307.00 and then effectively requested the Board to proceed against the Respondent.
The Issue The issue posed for decision herein is whether or not the Respondent, based on conduct set forth hereinafter in detail, unlawfully withdrew and transferred monies from an escrow account and is therefore guilty of fraud, dishonest dealing by trick, scheme or device, or breach of trust and conversion within the purview of Subsection 475.25(1)(b), Florida Statutes (1979) At the final hearing, Petitioner called Donald Lloyd, Respondent, Donald Reda and Kenneth Viviano as its witnesses. Petitioner offered Exhibits 1 through 7 which were received into evidence. Respondent called no witnesses and offered Respondent's Exhibits 1 through 4 which were received into evidenced.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, posthearing memoranda and the entire record complied herein, I hereby make the following relevant findings of fact. By its administrative complaint filed herein on July 29, 1981, Petitioner seeks to take disciplinary action against the Respondent as licensee and against his license as a real estate salesman. During times material herein, Respondent was a licensed real estate salesman and has been issued license No. 0188032. During times material herein, Century 21, Lloyds of Lauderdale, Inc., was a Florida licensed real estate corporate broker with its offices located at 3300 NE 33rd Street, Fort Lauderdale, Florida corporate entity was licensed under that name on October 12, 1979. The predecessor entity was known as Lloyds' of Lauderdale, Inc., and had its escrow account at Gulfstream Bank H.A., formerly known as Gulfstream American Bank and Trust Company H.A., formerly known as American National Bank and Trust Company of Fort Lauderdale, which account number was 005-1-00160-3. Upon obtaining the change of name, i.e. Century 21, Lloyds of Lauderdale, Inc., the successor entity maintained the same escrow account number at the same bank and continued using the checks on that account bearing its former name, Lloyds of Lauderdale, Inc. During times material herein, Respondent was a salesman associated with Century 21 and was an authorized signatory on the above-referred escrow account. Respondent was also a stockholder, officer and director of Century 21, Lloyds of Lauderdale, Inc. Respondent was also the owner of an unrelated business known as Brewer's Care Center, which in turn operated a motel located in Georgia. During times material, Respondent owned a one-third (1/3) interest in Century 21, Lloyds of Lauderdale, Inc. On February 3, 1981, Respondent issued a check, No. 79-228, drawn on the Century 21, Lloyds of Lauderdale, Inc., escrow account, payable to Brewer's Care Center in the amount of $11,903.12. Approximately fifteen days later, on February 18, 1981, Respondent issued another check, No. 79-223, drawn on the above-referenced escrow account payable to Brewer's Care Center in the amount of $2,500. On March 3, 1981 Respondent verbally authorized the Gulfstream Bank to withdraw $399.66 from the referenced escrow account to pay interest on loan No. 59-004-00-058-3866-4. Also, on March 18, 1981 Respondent verbally authorized the withdrawal of $799.32 to be applied against the same loan. Neither of the above-referenced checks or verbal loan authorizations were, in any wise, connected with any real estate transactions from which monies were held in escrow by the Respondent. The verbal withdrawals and checks, either authorized or drawn by the Respondent, reduced the escrow account by a sum of approximately $15,602.10 and depleted the account to such an extent that Century 21, Lloyds of Lauderdale, Inc. was unable to meet demands for the return of the escrow funds held in trust (See Petitioner's Composite Exhibit No. 1). Respondent took the position that the monies represented by the payments of the two checks made payable to Brewer's Care Center were repayments of loans and that he was unaware that the accounts which the checks were drawn against were, in fact, escrow accounts. In this regard, evidence reveals that the Respondent suffered a heart attack during November of 1980 and his health regressed to the degree that he was placed in the intensive care unit at a hospital in Cleveland, Ohio for an extended period of time. At the conclusion of the Petitioner's case in chief, Respondent's counsel filed an ore tenus motion to continue the subject hearing until the following day. The undersigned afforded Respondent's counsel an opportunity to submit, for the record, his basis for the continuance. However, that motion was denied based on the numerous continuances which had been previously granted by the undersigned to Respondent's counsel (See Order dated November 16, 1982 - Copy attached).
The Issue Whether Petitioners' rental property was licensed under Chapter 509, Florida Statutes (2003).
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following findings of fact are made: Petitioners, Robert Meller, Jr., and Kristine M. Meller, were owners of a rental property (a house located at 4516 Bowan Bayou) in Sanibel, Florida. In addition, they owned a condominium in the same area. Respondent Cross held a valid real estate license at all times material to matters at issue. Respondent Cross had a business relationship with Petitioners, which antedated the purchase of the Bowen Bayou house as a result of being the leasing agent for a condominium association with which Petitioners were associated. Respondent DBPR is the State of Florida agency which represents the FREC in matters such as this matter. In January 2000, Petitioners purchased the house in Sanibel located at 4516 Bowan Bayou. On or about January 20, 2000, Respondent Cross mailed a Rental Property Management Agreement to Petitioners for the property located at 4516 Bowan Bayou, Sanibel, Florida. The parties to this contract were Petitioners and Properties in Paradise, Inc. Petitioner, Robert Meller, Jr., signed the contract and returned the contract to Respondent Cross. Petitioners maintain that the Rental Property Management Agreement was not signed by Petitioner, Robert Meller, Jr., and that his name is forged. He maintains that he entered into an oral agreement with Respondent Cross, individually, to manage the property. From the purchase of the house in January 2000 through April 2001, Petitioners received correspondence, including a monthly "owner statement" reflecting short-term rental income, commissions, and debits for maintenance, from Properties in Paradise, Inc., regarding all aspects of the business relationship contemplated by the Rental Property Management Agreement. By letter dated January 20, 2000, Petitioner, Robert Meller, Jr., authorized "Revonda Cross of Properties in Paradise as my agent in establishing telephone and electrical service and so forth for my property on Sanibel Island at 4516 Bowen's [sic] Bayou Road." Thereafter, Petitioners received correspondence from Respondent Cross relative to the subject property wherein she is identified as "Operations Manager, Properties in Paradise, Inc." During the relevant time period, Petitioners' property was rented at least 22 times; once for 17 days, four times for 14 days, once for nine days, thirteen times for seven days, and once for five days. The frequency and term of these rentals qualify for the statutory definition of a "resort dwelling" and transient rental dwelling. Properties in Paradise, Inc., listed the property located at 4516 Bowan Bayou in the list of properties it provided the Division of Hotels and Restaurants as licensed in accordance with Chapter 509, Florida Statutes (2005). In April 2001, Properties in Paradise, Inc., through an attorney, notified clients that it had effectively ceased doing business. At that time, Petitioners were owed $11,588.06, which went unpaid. Petitioners made a claim in July 2001, against Respondent Cross to recover their loss from the Florida Real Estate Recovery Fund. In October 2003, Petitioners' claim was denied by the Florida Real Estate Recovery Fund.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Department of Business and Professional Regulation, enter a final order denying Petitioners' claim for recovery from the Florida Real Estate Recovery Fund. DONE AND ENTERED this 21st day of February, 2006, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of February, 2006. COPIES FURNISHED: Joseph A. Solla, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801N Orlando, Florida 32801-1757 Robert L. Meller, Jr., Esquire Best & Flanagan, LLP 225 South 6th Street, Suite 4000 Minneapolis, Minnesota 55402-4690 Revonda Stewart Cross 1102 South East 39th Terrace, No. 104 Cape Coral, Florida 33904 Nancy B. Hogan, Chairman Florida Real Estate Commission 400 West Robinson Street, Suite 801N Orlando, Florida 32801 Josefina Tamayo, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
