02-001644PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Marvin L. Popkin Status: Closed Recommended Order on Wednesday, August 14, 2002.

Summary: Thirty-day suspension, $1000 fine, and $512 in costs for failure of real estate broker to allow office inspection and audit.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 02 - 1644PL

)

MARVIN L. POPKIN, )

)

Respondent. )

___________ ___________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Miami, Florida, on July 23, 2002.

APPEARANCES

For Petitioner: Donna K. Ryan

Senior Attorney

Department of Business and

Professional Regulation

Legal Section -- Suite N 308

Hurston Building, North Tower

400 West Robinson Street

Orlando, Florida 32801 - 1772

For Respondent: Frank M. Marks

Richard J. Diaz, P.A.

3127 Ponce de Leon Boulevard

Coral Gables, Florida 33134

STATEMENT OF THE ISSUES

The issues are whether Respondent is guilty of failing to

allow inspection of records, in violation of Sections 475.5015

and 475.25(1)(e), Florida Statutes; failing to comply with a

subpoena, in violation of Sections 455.227, 475.42(1)(h), and

475 .25(1)(e), Florida Statutes; obstructing the enforcement of

Chapter 475, in violation of Sections 475.42(1)(i) and

475.25(1)(e), Florida Statutes; and, if guilty of any of these

violations, what penalty should be imposed, pursuant to Rule

61J2 - 24.001, Flor ida Administrative Code.

PRELIMINARY STATEMENT

By Amended Administrative Complaint dated August 17, 2001,

Petitioner alleged that Respondent was last licensed as a

voluntary inactive broker and Lakeview Marketing Group, Inc.,

was formerly registered as a Florida real estate broker.

The Amended Administrative Complaint alleges that, on

February 10, 1998, Respondent, as agent for Flick Investments,

Ltd., entered into a Non - binding Reservation and Deposit Receipt

Agreement with Vernetta Lovett. The agreem ent acknowledges that

Respondent received a $500 deposit toward the purchase of a

premanufactured home and specified lot. The Amended

Administrative Complaint alleges that Respondent failed to place

the deposit immediately in his escrow account.

The Amen ded Administrative Complaint alleges that, on

October 27, 1998, Respondent refused to allow Petitioner's

investigator to conduct an office inspection and audit. The

Amended Administrative Complaint alleges that, on November 3,

1998, Petitioner served Resp ondent with a subpoena duces tecum

seeking bank and reconciliation statements for Respondent's real

estate brokerage business. Respondent allegedly failed to

comply with the subpoena. The Amended Administrative Complaint

alleges that, on February 11, 199 9, Respondent again refused to

allow Petitioner's investigator to conduct an audit of the

escrow account.

Count I of the Amended Administrative Complaint alleges

that Respondent has failed to deposit immediately trust funds,

in violation Rule 61J12 - 14.010 , Florida Administrative Code, and

Section 475.25(1)(e), Florida Statutes.

Count II of the Amended Administrative Complaint alleges

that Respondent deposited personal funds with escrow funds, in

violation of Rule 61J12 - 14.008(1)(c), Florida Administrative

Code, and Section 475.25(1)(e), Florida Statutes.

Count III of the Amended Administrative Complaint alleges

that Respondent failed to allow inspection of records, in

violation of Sections 475.5015 and 475.25(1)(e), Florida

Statutes.

Count IV of the Amen ded Administrative Complaint alleges

that Respondent failed to comply with a subpoena, in violation

of Sections 455.227, 475.42(1)(h), and 475.25(1)(e), Florida

Statutes.

Count V of the Amended Administrative Complaint alleges

that Respondent obstructed the enforcement of Chapter 475 or the

enforcement of any lawful duty by any person acting under the

authority of Chapter 475, in violation of Sections 475.42(1)(i)

and 475.25(1)(e), Florida Statutes.

Respondent timely requested a hearing.

In the Joint R esponse to the Pre - Hearing Order filed

June 14, 2002, the parties reduced the issues to those stated in

Counts III, IV, and V of the Amended Administrative Complaint.

At the hearing, Petitioner called one witnesses and offered

into evidence six exhibits : Petitioner Exhibits 1 - 6.

Respondent called three witnesses and offered into evidence two

exhibits: Respondent Exhibits 1 - 2. All exhibits were admitted.

The court reporter filed the transcript on August 2, 2002.

Petitioner filed a proposed recommend ed order on August 12,

2002.

FINDINGS OF FACT

1. Respondent is 71 years old and has been licensed as a

real estate broker since 1956. From April 15, 1996, through

March 31, 1999, Respondent was an active licensed real estate

broker. On April 1, 1999, th rough the present, Respondent's

license became involuntary inactive due to nonrenewal.

2. In early 1998, Respondent, on behalf of another

developer, approached Jerry Flick and asked if he wanted to sell

certain land. Mr. Flick replied that he did not, bu t proposed

that Respondent help him sell prefabricated homes. Although he

lacked lots on which to place the homes, Mr. Flick stated that

local governments would make available "tax - deeded" lots for

these affordable homes.

3. Respondent agreed to handle t he sales of the

prefabricated homes. Respondent hired five sales agents and

used brochures supplied him by Mr. Flick and the manufacturer.

As instructed by Mr. Flick, Respondent and his staff offered the

prefabricated homes, exclusive of lots, at $69,900 each.

4. About one week after sales started, Respondent opened,

under the name of Lakeview Marketing Group, Inc. (Lakeview), one

escrow bank account and one business bank account. He allowed

Mr. Flick's associate, Ruth Bidash, to handle the banking

re sponsibilities, including the depositing of customers' escrow

deposits.

5. From April 15, 1996, through July 14, 1998, Lakeview

Marketing Group, Inc. (Lakeview), was a registered broker

corporation. Between these dates, Respondent served as the

registe red, qualifying broker of Lakeview. In this capacity,

Respondent and Lakeview have handled the marketing of three real

estate projects.

6. In the first 30 days, working seven days a week,

Respondent and his sales staff had sold 60 prefabricated homes.

A t this time, Mr. Flick told Respondent that the prefabricated

homes were more expensive than he had thought, and Respondent

and his sales staff needed to raise the unit sale price, even

for existing contracts, by $10,000.

7. The only copies of agreements are between Lakeview, as

agent for Flick Investments, Ltd., and Vernetta A. Lovett. The

first agreement is a Non - Binding Reservation and Deposit Receipt

Agreement for $69,900 and dated January 21, 1998. The subjects

of this agreement are a "house and lot " that are described only

as "1320 N.W. 53rd St." and "Model[:] Crestview." The

Crestview is a model of prefabricated home that initially sold

for $69,900. This agreement requires purchasers to make escrow

checks payable to Lakeview's escrow account.

8. The second agreement is a Purchase and Sale Agreement

between Lakeview, as agent for Flick Investments, Ltd., and

Lovett for $69,900 and dated February 10, 1998. The subjects of

this agreement are lot 32, block 3, of the Palm Park

subdivision, as record ed in Dade County Plat Book 44, page 24,

and the "Crestview model dwelling unit which has been

constructed by Seller on that lot (the lot and dwelling unit

hereafter referred to as the 'Property' . . .." This agreement

requires purchasers to make escrow c hecks payable to Lakeview.

9. Lakeview held all of the escrow deposits for all of the

sales made by Respondent and his staff. Probably, these sales

were exclusively of prefabricated homes. Respondent testified

that the sales consisted exclusively of pre fabricated homes,

although, on its face, the Lovett contract is for a

prefabricated home and land. The Lovett contract is for a price

probably attributable entirely to the land. Perhaps a local

government may have supplied the land for free due to the

af fordable - housing offered by this program.

10. None of the contracts ever closed. Respondent seems

to have borne substantial expenses from this failed venture,

even though his participation was limited to 2.5 percent of the

sales price. The banking rec ords for Lakeview do not suggest

meticulous bookkeeping.

11. Following the receipt of two complaints concerning the

failed sales program, including claims of unreturned escrow

deposits, Petitioner's investigator contacted Respondent and

supplied him wit h a copy of the complaints, one of which came

from Mr. Flick. Respondent refused to allow the investigator to

conduct an office inspection and audit. Instead, Respondent

agreed to meet the investigator, but only at the office of, and

in the presence of, Respondent's attorney. Respondent claimed

that Petitioner lacked any jurisdiction because the sales

program did not involve real estate.

12. After not obtaining any business records from

Respondent voluntarily, on October 30, 1998, Petitioner served

Resp ondent with a subpoena duces tecum, demanding various

documents by November 20, 1998. The subpoena states that it is

issued pursuant to Section 455.223, Florida Statutes, and that

the recipient "shall respond to this subpoena as directed unless

excused by the party who requested the issuance of the subpoena

or by order of [Petitioner]." The only response that Petitioner

received was a motion to quash subpoena, which Respondent's

attorney filed with Petitioner. The record does not reveal when

the motion w as served or filed. The motion again asserted that

Lakeview and Popkin were not engaged in the practice of real

estate. The record does not reveal what, if any, action

Petitioner took in response to the motion.

13. Neither Petitioner nor any other autho rity ever

excused compliance with the subpoena. When Petitioner's

investigator attempted to pursue the matter with Respondent,

after the deadline for production had passed, Respondent

threatened a personal lawsuit against him and told him to go

"fuck" him self. (Respondent apologized at the hearing for his

intemperate remark.)

14. On December 22, 1998, Petitioner subpoenaed the

Lakeview bank records directly from the bank. The bank supplied

the subpoenaed information.

15. The sole evidence that Petition er produced for the

cost of the investigation is 16 hours of the investigator's

time. The cost of this time is $32 per hour, for a total of

$512.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the subject matter. Se ction 120.57(1),

Florida Statutes. (All references to Sections are to Florida

Statutes.)

17. Section 475.5015 provides:

Each broker shall keep and make available to

the department such books, accounts, and

records as will enable the department to

determi ne whether such broker is in

compliance with the provisions of this

chapter. Each broker shall preserve at

least one legible copy of all books,

accounts, and records pertaining to her or

his real estate brokerage business for at

least 5 years from the dat e of receipt of

any money, fund, deposit, check, or draft

entrusted to the broker or, in the event no

funds are entrusted to the broker, for at

least 5 years from the date of execution by

any party of any listing agreement, offer to

purchase, rental proper ty management

agreement, rental or lease agreement, or any

other written or verbal agreement which

engages the services of the broker. If any

brokerage record has been the subject of or

has served as evidence for litigation,

relevant books, accounts, and records must

be retained for at least 2 years after the

conclusion of the civil action or the

conclusion of any appellate proceeding,

whichever is later, but in no case less than

a total of 5 years as set above. Disclosure

documents required under ss. 475 .2755 and

475.278 shall be retained by the real estate

licensee in all transactions that result in

a written contract to purchase and sell real

property.

18. Section 455.227(1)(q) provides that the Florida Real

Estate Commission may impose discipline if a licensee is guilty

of:

Violating any provision of this chapter, the

applicable professional practice act, a rule

of the department or the board, or a lawful

order of the department or the board, or

failing to comply with a lawfully issued

subpoena of t he department.

19. Section 475.42(1)(h) and (i) provides:

(h) No person shall fail or refuse to

appear at the time and place designated in a

subpoena issued with respect to a violation

of this chapter, unless because of facts

that are sufficient to excu se appearance in

response to a subpoena from the circuit

court; nor shall a person who is present

before the commission or a member thereof or

one of its authorized representatives acting

under authority of this chapter refuse to be

sworn or to affirm or f ail or refuse to

answer fully any question propounded by the

commission, the member, or such

representative, or by any person by the

authority of such officer or appointee; nor

shall any person, so being present, conduct

herself or himself in a disorderly,

disrespectful, or contumacious manner.

(i) No person shall obstruct or hinder in

any manner the enforcement of this chapter

or the performance of any lawful duty by any

person acting under the authority of this

chapter or interfere with, intimidate, or

offer any bribe to any member of the

commission or any of its employees or any

person who is, or is expected to be, a

witness in any investigation or proceeding

relating to a violation of this chapter.

20. Section 475.25(1)(e) provides that the Florida R eal

Estate Commission may impose discipline for any violation of

Chapter 455 or 475, Florida Statutes. Section 455.227(3)(a)

authorizes the imposition of costs:

In addition to any other discipline imposed

pursuant to this section or discipline

imposed for a violation of any practice act,

the board, or the department when there is

no board, may assess costs related to the

investigation and prosecution of the case

excluding costs associated with an

attorney's time.

21. Petitioner must prove the material al legations by

clear and convincing evidence. Department of Banking and

Finance v. Osborne Stern and Company, Inc. , 670 So. 2d 932 (Fla.

1996) and Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

22. Petitioner has proved that Respondent failed to allow

i nspection of records, in violation of Sections 475.5015 and

475.25(1)(e).

23. Respondent contends that Petitioner had no right to

inspect these records because Respondent and Lakeview were not

engaged in the sale of real estate and, thus, Petitioner's

inv estigator lacked the jurisdiction to inspect the records.

The Lovett contract, on its face, involves real estate. This

fact alone suffices to allow Petitioner's investigator to obtain

access to the records to investigate a complaint. Although

Petitioner has not proved the contract, or any other, actually

involved real estate, the apparent involvement of real estate

must be sufficient to vest Petitioner with jurisdiction to

inspect the records. For this reason, it is unnecessary to

address Petitioner's a lternative contention, which is that it

always has jurisdiction to inspect any and all records of all

licensed real estate entities.

24. Petitioner has failed to prove that Respondent failed

to comply with a subpoena, in violation of Sections 455.227,

475 .42(1)(h), and 475.25(1)(e). This is a separate and distinct

alleged violation from the failure to allow inspection of

records, but the proof fails to establish the elements of this

offense.

25. Section 455.223 provides:

For the purpose of any investig ation or

proceeding conducted by the department, the

department shall have the power to

administer oaths, take depositions, make

inspections when authorized by statute,

issue subpoenas which shall be supported by

affidavit, serve subpoenas and other

proces s, and compel the attendance of

witnesses and the production of books,

papers, documents, and other evidence. The

department shall exercise this power on its

own initiative or whenever requested by a

board or the probable cause panel of any

board. Challe nges to, and enforcement of,

the subpoenas and orders shall be handled as

provided in s. 120.569.

26. Section 120.569(2)(k)1. provides:

Any person subject to a subpoena may, before

compliance and on timely petition, request

the presiding officer having jurisdiction of

the dispute to invalidate the subpoena on

the ground that it was not lawfully issued,

is unreasonably broad in scope, or requires

the production of irrelevant material.

27. Respondent referred the subpoena to his attorney, who

filed a mot ion to quash. Although the record is silent as to

whether the motion was timely, Petitioner has failed to prove

that it was untimely. Without resolving the legal defense

raised by Respondent's attorney, Petitioner cannot predicate

discipline on the failu re of Respondent or his attorney to

produce documents.

28. Petitioner has failed to prove that Respondent

otherwise obstructed the enforcement of Chapter 475 or the

enforcement of any lawful duty by any person acting under the

authority of Chapter 475, in violation of Sections 475.42(1)(i)

and 475.25(1)(e). The obstructive incidents are those discussed

immediately above.

29. Admitting that it did not prove Count I, Petitioner

contends in its proposed recommended order that it proved the

allegations of Co unt II -- that Respondent deposited personal

funds with escrow funds, in violation of Rule

61J12 - 14.008(1)(c), Florida Administrative Code, and Section

475.25(1)(e). The Joint Response to the Pre - Hearing Order did

not preserve this issue.

30. Rule 61J2 - 24.001, Florida Administrative Code,

provides the applicable penalty guidelines for these violations.

Rule 61J2 - 24.001(4)(f) applies to the violation of any provision

of Chapter 475 or 455, Florida Statutes. The penalties under

Rule 61J2 - 24.001(4)(f) ra nge from an eight - year suspension to

revocation and a $1000 fine. However, Rule 61J2 - 24.001(4)(cc)

best describes the offense proved in this case because it

applies to the failure to respond to a subpoena, which is a

violation of Section 475.42(1)(h). Re fusing to comply with a

subpoena is comparable to refusing to allow an inspection and

audit. The penalties under Rule 61J2 - 24.001(4)(cc) range from a

$1000 fine and a six - month suspension to a five - year suspension.

31. Respondent is obviously nearing the end of a long

professional career, which, to this point, has not been

blemished by the imposition of any discipline. These years of

good service provide the context for his belligerence with

Petitioner's investigator and, thus, for the appropriate

discip line, which should not exceed a $1000 administrative fine,

30 - day suspension, and costs of $512.

RECOMMENDATION

It is

RECOMMENDED that the Florida Real Estate Commission enter a

final order finding Respondent guilty of failing to allow

inspection of reco rds, in violation of Sections 475.5015 and

475.25(1)(e), Florida Statutes, but not of the other charges in

the Amended Administrative Complaint, and imposing a 30 - day

suspension, $1000 administrative fine, and $512 cost assessment.

DONE AND ENTERED this 1 4th day of August, 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 14th day of Aug ust, 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

Florid a Real Estate Commission

Department of Business and

Professional Regulation

400 West Robinson Street

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

Donna K. Ryan

Senior Attorney

Department of Business and

Professional Regulation

Legal Section -- Suite N 308

Hurston Building North Tower

400 West Robinson Street

Orlando, Florida 32801 - 1 772

Frank M. Marks

Richard J. Diaz, P.A.

3127 Ponce de Leon Boulevard

Coral Gables, Florida 33134

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order must be filed with the agency that

will issue the final order in this case.