99-002917 Department Of Business And Professional Regulation, Florida Real Estate Commission vs. Marjorie A. Koutroubis And Prestige International Realty Corporation
 Status: Closed
Recommended Order on Wednesday, February 9, 2000.


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Summary: When Respondents` reconciliation statements revealed a shortage in the disbursement escrow account and no explanation for the shortage was provided, Respondents violated 475.25(1)(k), Florida Statutes. Recommended fine and reprimand.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DEPARTMENT OF BUSINESS AND )

13PROFESSIONAL REGULATION, FLORIDA )

17REAL ESTATE COMMISSION, )

21)

22Petitioner, )

24)

25vs. ) Case No. 99-2917

30)

31MARJORIE A. KOUTROUBIS AND )

36PRESTIGE INTERNATIONAL REALTY )

40CORPORATION, )

42)

43Respondents. )

45___________________________________)

46RECOMMENDED ORDER

48Pursuant to notice, the Division of Administrative Hearings,

56by its duly-designated Administrative Law Judge, Carolyn S.

64Holifield, held a formal hearing on November 23, 1999, by video

75teleconference, between Tallahassee and Tampa, Florida.

81APPEARANCES

82For Petitioner: Ghunise Coaxum, Esquire

87Department of Business and

91Professional Regulation

93Division of Rea l Estate

98400 West Robinson Street, Suite N-308

104Orlando, Florida 32801

107For Respondent: Stephen F. Ricci, Qualified Representative

114Prestige International Realty Corporation

1181111 North Westshore Boulevard

122Tampa, Florida 33607

125STATEMENT OF THE ISSUES

129This issues in this case are: (1) Whether Respondent failed

139to maintain trust funds in the real estate brokerage escrow bank

150account or some other property depository until disbursement

158thereof was properly authorized in violation of Section

166475.25(1)(k), Florida Statutes; (2) Whether Respondent is guilty

174of fraud, misrepresentation, concealment, false promises, false

181pretenses, dishonest dealings by trick, scheme or device,

189culpable negligence, or breach of trust in a business transaction

199in violation of Section 475.25(1)(b), Florida Statutes; and (3)

208If so, what penalty should be imposed on her real estate license.

220PRELIMINARY STATEMENT

222On August 19, 1998, Petitioner, Department of Business and

231Professional Regulation, Division of Real Estate (Department),

238filed a four-count Administrative Complaint against Respondents,

245Marjorie A. Koutroubis and Prestige International Realty,

252Corporation, alleging that they had violated Sections

259475.25(1)(k) and 475.25(1)(b), Florida Statutes.

264Counts I and III of the Administrative Complaint allege the

274Respondent Koutroubis and Respondent Prestige International

280Realty, Corporation, respectively, violated Section 475.25(1)(k),

286Florida Statutes, by failing to maintain trust funds in the real

297estate brokerage escrow bank account or some other depository

306until disbursement of such funds were properly authorized.

314Counts II and IV of the Administrative Complaint alleged that

324Respondents violated Section 475.25(1)(b), Florida Statutes, by

331being guilty of misrepresentation, concealment, false pretenses,

338dishonest dealings by trick, scheme or device, culpable

346negligence, or breach of trust in a business transaction.

355Respondents challenged the allegations and requested a

362formal hearing and also filed a cross-complaint seeking

370compensation for "unjust loss of income incurred and punitive

379damages for the emotional, physical, and professional suffering

387intentionally and wrongfully imposed."

391At hearing, Respondents were advised that the undersigned

399was without jurisdiction to decide the issues raised in the

409cross-complaint and to award the damages sought therein.

417Accordingly, Respondent's cross-complaint is hereby dismissed.

423At hearing, Petitioner called two witnesses, Michael Day and

432George Sinder and had four exhibits received into evidence.

441Respondent Koutroubis testified on her own behalf and presented

450the testimony of two witnesses, Nora Scandella and Stephen Ricci.

460Respondents' Exhibits 1 and 3 were received into evidence.

469Respondents' Exhibit 2 was proffered.

474The Transcript of the proceeding was filed on December 8,

4841999. Both parties filed Proposed Recommended Orders.

491FINDINGS OF FACT

4941. Petitioner is a state licensing and regulatory agency

503charged with the responsibility and duty to prosecute

511administrative complaints pursuant to the laws of the State of

521Florida, in particular, Chapters 455 and 475, Florida Statutes,

530and Chapter 61J2, Florida Administrative Code.

5362. Respondent Marjorie Koutroubis, is and was at all times

546material hereto, a licensed Florida real estate broker having

555been issued License No. BK-039112.

5603. Respondent Prestige International Realty Corporation

566(Prestige International Realty), is and was at all times material

576hereto, a corporation registered as a Florida real estate broker

586having been issued Registration CQ-0274989. The business is

594located at 1111 North Westshore Boulevard, No. 212, Tampa,

603Florida 33607.

6054. At all times material hereto, Respondent Koutroubis was

614licensed and operating as qualifying broker and officer of

623Prestige International Realty.

6265. On or about September 11, 1997, Michael Day, an

636investigator with the Department, went to the office of Prestige

646International Realty to conduct an audit of escrow accounts being

656held by Respondents. However, Mr. Day was unable to complete the

667audit on that day because the company's records were unavailable

677as a result of a computer problem.

6846. On January 12, 1998, Mr. Day returned to the office of

696Prestige International Realty, and performed an audit of two

705escrow accounts being held by Respondents, the security deposit

714account, and the disbursement account.

7197. In conducting the audit, Mr. Day used and relied upon

730information contained in documents provided to him by Respondent

739Koutroubis or her employees.

7438. The audit of Respondents' escrow accounts revealed that

752the security deposit account was balanced but the disbursement

761account had a shortage.

7659. According to Prestige International Realty's December

7721997 escrow reconciliation statement, the closing balance or the

781broker's trust liability was $2,700.00 and the adjusted account

791balance was $996.15. The difference between the broker's trust

800liability and adjusted account balance reflected a shortage of

809$1,703.85 in the escrow account being maintained by Respondents.

81910. The subject Prestige International Realty's

825reconciliation statements contained no description or explanation

832to explain the discrepancy described in paragraph 9. Moreover,

841neither Respondent Koutroubis nor Mr. Ricci could explain the

850reason for the apparent shortage.

85511. The subject reconciliation form was prepared by

863Mr. Ricci and signed by Respondent Koutroubis. Prior to signing

873the reconciliation sheet, Respondent Koutroubis did not question

881the figures on the sheet. Rather she accepted the figures

891provided on the form by Mr. Ricci.

89812. After the January 12, 1998, audit of Prestige

907International Realty's escrow accounts, Mr. Day met with

915Respondent Koutroubis and discussed the findings of the audit.

924Mr. Day told Respondent Koutroubis that the only way to correct

935or resolve the problem of the shortage of funds in the escrow

947account was to deposit $1,703.85 into Prestige International

956Realty's account.

95813. Respondent Koutroubis did not know why there was a

968shortage in the escrow account. Nevertheless, in an effort to

978resolve the problem, she immediately wrote a check for $1,7903.85

989and deposited it into the Prestige International Realty's bank

998account.

99914. Mr. Day recorded the findings of the Audit on the

1010Department's Office Inspection and Escrow/Trust Account Audit

1017Form (Audit Form). In the "Remarks" section of the form, Mr. Day

1029noted that in one instance, the improper reconciliation form had

1039been used. With regard to the shortage in the rental

1049distribution account. Mr. Day wrote, "Broker to transfer

1057shortage for rental distribution." In the "Corrective Action"

1065section of the form, Mr. Day wrote, "see above" and "use correct

1077reconciliation sheet."

107915. The Audit Form also included items which required the

1089investigator to indicate what, if any, action was taken in a

1100case. The investigator was to respond "yes" or "no" to each of

1112the following: (1) Was a citation issued; (2) Was a notice of

1124noncompliance issued; and (3) Was a complaint docketed. On the

1134Audit Form, Mr. Day indicated that no citation or notice of

1145noncompliance was issued to Respondents but that a complaint was

1155docketed.

115616. Respondent Koutroubis and Mr. Day signed the Audit Form

1166on January 14, 1998.

117017. After Respondent Koutroubis signed the Audit Form and

1179wrote a check for the amount of the shortage, she mistakenly

1190believed that no further action would be taken with regard to the

1202cited violations. Respondent Koutroubis' belief was based on the

1211fact that no citation or notice of noncompliance was issued and

1222on her understanding of Mr. Day's comments concerning how to

1232resolve the shortage in the escrow account.

123918. Neither Mr. Day nor any other Department employee told

1249Respondent Koutroubis or Mr. Ricci that if a check were written

1260to cover the shortage in the escrow account, that the Department

1271would take no further action.

127619. Mr. Day believed that the likely reason for the

1286shortage in the disbursement account was that proceeds were

1295disbursed prior to checks clearing.

130020. After the subject audit of R espondents' 1997 records,

1310Respondent Koutroubis began using a new form to prepare Prestige

1320International Realty's monthly reconciliation statements.

132521. As of the date of the hearing, there is no indication

1337that there have been shortages or overages in the Prestige's

1347escrow accounts since the January 1998 audit.

1354CONCLUSIONS OF LAW

135722. The Division of Administrative Hearings has

1364jurisdiction over the parties to and the subject matter of this

1375proceeding. Section 120.57(1), Florida Statutes.

138023. The D epartment is statutorily empowered to suspend,

1389revoke, or otherwise discipline the real estate license of any

1399licensee in Florida found guilty of any act enumerated in Section

1410475.25, Florida Statutes.

141324. The Department has the burden of proof in this

1423proceeding and to prevail, must show by clear and convincing

1433evidence that Respondent committed the acts alleged in the

1442Administrative Complaint and the reasonableness of any penalty to

1451be imposed. Department of Banking and Finance v. Osborne Stern ,

1461670 So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510 So. 2d 292

1474(Fla. 1987).

147625. In Evans Packing Company v. Department of Agriculture

1485and Consumer Services , 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA

14981989), the court explained:

1502[C]lear and convincing evidence requires that

1508the evidence must be found to be credible;

1516the facts to which the witnesses testify must

1524be distinctly remembered; the evidence must

1530be precise and explicit and the witnesses

1537must be lacking in confusion as to the facts

1546in issue. The evidence must be of such

1554weight that it produces in the mind of the

1563trier of fact the firm belief of [sic]

1571conviction, without hesitancy, as to the

1577truth of the allegations sought to be

1584established.

1585Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

159726. The Administrative Complaint against Respondent

1603contains four counts. Count I alleges that Respondent Koutroubis

1612is guilty of failure to maintain trust funds in the real estate

1624brokerage bank account until disbursement was properly authorized

1632in violation of Section 475.25(1)(k), Florida Statutes. Count II

1641alleges that Respondent Koutroubis is guilty of fraud,

1649misrepresentation, concealment, false promises, false pretenses,

1655dishonest dealing by trick, scheme or device, culpable

1663negligence, or breach of trust in a business transaction in

1673violation of Section 475.25(1)(b), Florida Statutes.

167927. Counts III and IV allege that Respondent Prestige

1688International Realty is guilty of the same conduct charged

1697against Respondent Koutroubis in Counts I and II of the

1707Administrative Complaint.

170928. With regard to Counts I and III, Rule 61J2-14.012,

1719Florida Administrative Code, provides in part:

1725(2) At least monthly, a broker shall cause

1733to be made a written statement comparing the

1741broker's total liability with the reconciled

1747bank balance(s) of all trust accounts. The

1754broker's trust liability is defined as the

1761sum total of all deposits received, pending

1768and being held by the broker at any point in

1778time . . . The broker shall review, sign and

1788date the monthly statement-reconciliation.

1792(3) Whenever the trust liability and the

1799bank balances do not agree, the

1805reconciliation shall contain a description or

1811explanation for the difference(s) and any

1817corrective action taken in reference to

1823shortages or overages of funds in the

1830account(s) . . . .

183529. The Department has met its burden as to Counts I and

1847III of the Administrative Complaint. The clear and convincing

1856evidence established that Respondents' trust liability and bank

1864balances for the period audited did not agree. Moreover, the

1874evidence established that Respondents' reconciliation forms for

1881that time period failed to include a description or explanation

1891for the differences. While the undisputed evidence shows that

1900Respondent Koutroubis took corrective action to resolve the

1908shortage, once she became aware of the problem, that action does

1919not absolve her from being penalized for failing to comply with

1930Section 475.25(1)(k), Florida Statutes, and Rule 61J2-14.012(2

1937and (3), Florida Administrative Code.

194230. Counts II and IV of the Administrative Complaint allege

1952that the Respondents are:

1956Guilty of fraud, misrepresentation, false

1961promises, false pretenses, dishonest dealing

1966by trick, scheme, or device, culpable

1972negligence, or breach of trust in any

1979business transaction in violation of Section

1985475.25(1)(b), Florida Statutes.

198831. In this case, there are no factual allegations of

1998conduct by Respondents that would give rise to the charges. More

2009significantly, there is no evidence that Respondent Koutroubis,

2017as a broker or officer of Prestige International Realty, engaged

2027in any conduct that constitutes "fraud, misrepresentation,

2034concealment, false promises, false pretenses, dishonest dealing

2041by trick, scheme, or device, culpable negligence or breach of

2051trust in a business transaction." In the absence of such

2061evidence, the Department has failed to meet its burden or proving

2072by clear and convincing evidence the allegations contained in

2081Counts II and IV of the Administrative Complaint.

208932. The discipline that may be imposed against a real

2099estate licensee are: revocation, suspension for a period not

2108exceeding ten years, imposition of an administrative fine not to

2118exceed $1,000 for each count or separate offense, a reprimand,

2129probation, and any or all of the foregoing. Section 475.25(1),

2139Florida Statutes, and Rule 61J2-24.001(3), Florida Administrative

2146Code.

214733. According to Rule 61J2-24.001(3), Florida

2153Administrative Code, the recommended penalty for a violation of

2162Section 475.25(1)(k), Florida Statutes, is a minimum of a 90-day

2172suspension of license and $1,000.00 fine up to a maximum of

2184revocation of license.

2187RECOMMENDATION

2188Based upon the foregoing Findings of Fact and Conclusions of

2198Law, it is:

2201RECOMMENDED that a final order be entered finding

2209Respondents guilty of violating Section 475.25(1)(k), Florida

2216Statutes; imposing an administrative fine of $1,000.00 on

2225Respondent Koutroubis; issuing a reprimand to Respondent Prestige

2233International Realty; and dismissing Counts II and IV of the

2243Administrative Complaint.

2245DONE AND ENTERED this 9th day of February, 2000, in

2255Tallahassee, Leon County, Florida.

2259___________________________________

2260CAROLYN S. HOLIFIELD

2263Administrative Law Judge

2266Division of Administrative Hearings

2270The DeSoto Building

22731230 Apalachee Parkway

2276Talla hassee, Florida 32399-3060

2280(850) 488-9675 SUNCOM 278-9675

2284Fax Filing (850) 921-6847

2288www.doah.state.fl.us

2289Filed with the Clerk of the

2295Division of Administrative Hearings

2299this 9th day of February, 2000.

2305COPIES FURNISHED:

2307Ghunise Coaxum, Esquire

2310Department of Business and

2314Professional Regulation

2316Division of Real Estate

2320400 West Robinson Street, Suite N-308

2326Orlando, Florida 32801

2329Stephen F. Ricci, Qualified Representative

2334Prestige International Realty Corporation

23381111 North Westshore Boulevard

2342Tampa, Florida 33607

2345Barbara D. Auger, General Counsel

2350Department of Business and

2354Professional Regulation

23561940 North Monroe Street

2360Tallahassee, Florida 32399-0792

2363Herbert S. Fecker, Division Director

2368Florida Real Estate Commission

2372400 West Robinson Street

2376Post Office Box 1900

2380Orlando, Florida 32802-1900

2383NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

2389All parties have the right to submit written exceptions within 15

2400days from the date of this Recommended Order. Any exceptions to

2411this Recommended Order should be filed with the agency that will

2422issue the final order in this case.

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Date
Proceedings
Date: 06/05/2000
Proceedings: Notice of Appeal filed. (filed by: Prestige International Realty Corp.)
Date: 05/19/2000
Proceedings: Final Order filed.
PDF:
Date: 05/10/2000
Proceedings: Agency Final Order
PDF:
Date: 02/09/2000
Proceedings: Recommended Order
PDF:
Date: 02/09/2000
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 11/23/99.
Date: 01/24/2000
Proceedings: Page 4 (Prestige International Corporation Proposed Recommended Order) (filed via facsimile).
Date: 12/30/1999
Proceedings: Respondent`s Proposed Finding of Facts and Proposed Disposition of Case filed.
Date: 12/20/1999
Proceedings: (Petitioner) Proposed Recommended Order (filed via facsimile).
Date: 12/08/1999
Proceedings: Transcript ; Petitioner`s Exhibits filed.
Date: 11/23/1999
Proceedings: Video Hearing Held; see case file for applicable time frames.
Date: 11/15/1999
Proceedings: (G. Coaxum) Pre-Hearing Stipulation (filed via facsimile).
Date: 09/08/1999
Proceedings: Amended Notice of Video Hearing sent out. (hearing set for November 23, 1999; 9:30 a.m.; Tampa and Tallahassee, Florida)
Date: 07/28/1999
Proceedings: Notice of Video Hearing sent out. (hearing set for November 23, 1999; 9:30 a.m.; Tampa and Tallahassee, Florida)
Date: 07/28/1999
Proceedings: Order of Pre-hearing Instructions sent out.
Date: 07/20/1999
Proceedings: (Petitioner) Unilateral Response to Initial Order (filed via facsimile).
Date: 07/19/1999
Proceedings: Respondent`s Answer to Initial Order (filed via facsimile).
Date: 07/08/1999
Proceedings: Initial Order issued.
Date: 07/06/1999
Proceedings: Agency Referral Letter; Answer and Counterclaim to Administrative Complaint; Administrative Complaint filed.

Case Information

Judge:
CAROLYN S. HOLIFIELD
Date Filed:
07/06/1999
Date Assignment:
07/08/1999
Last Docket Entry:
06/05/2000
Location:
Tampa, Florida
District:
Middle
Agency:
ADOPTED IN TOTO
 

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