02-003677PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Shirley K. Bemenderfer Status: Closed Recommended Order on Wednesday, January 29, 2003.

Summary: Respondent`s negligent bookkeeping constituted violation of records requirements of Rule 61J2-14.012(2) and (3), Florida Administrative Code, but not culpable negligence or failure to maintain trust funds.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 02 - 3677PL

)

SHIRLEY K. BEMENDERFER, )

)

Respondent. )

__________________ _______________)

RECOMMENDED ORDER

Pursuant to notice, the final hearing was held in this case

on November 14, 2002, in Fort Pierce, Florida, before Larry J.

Sartin, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Lorenzo Level, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N802

Orlando, Florida 32801

For Respondent: James R. Mitchell, Esqu ire

Baker & Hostetler LLP

200 South Orange Avenue, Suite 2300

Orlando, Florida 32801

STATEMENT OF THE ISSUE

The issue in this case is whether the Respondent, Shirley

K. Bemenderfer, committed the violations alleged in an

Administrative Complain t issued by the Petitioner, Department of

Business and Professional Regulation, Division of Real Estate,

on December 31, 2001, and, if so, the penalty that should be

imposed.

PRELIMINARY STATEMENT

Petitioner issued an Administrative Complaint on

December 3 1, 2001, against Respondent, alleging in Count I that

Respondent "is guilty of culpable negligence, or breach of trust

in any business transaction in violation of Section

475.25(1)(b), Florida Statutes"; in Count II that Respondent "is

guilty of failure to account or deliver funds in violation of

Section 475.25(1)(d)1, Florida Statutes"; in Count III that

Respondent "is guilty of failure to maintain trust funds in a

real estate brokerage escrow bank account or some other proper

depository until disbursement thereof was properly authorized in

violation of Section 475.25(1)(k), Florida Statutes"; in

Count IV that Respondent "is guilty of failure to properly

prepare the required written monthly escrow statement -

reconciliation in violation of Rule 61J2 - 14.012(2) and (3),

Florida Administrative Code and is, therefore, in violation of

Section 475.25(1)(e), Florida Statutes"; and in Count V that

Respondent "is guilty of having been found guilty for a second

time of any misconduct that warrants [her] suspension or ha s

been found guilty of a course of conduct or practices which

shows that [she] is so incompetent, negligent, dishonest, or

untruthful that the money, property, transactions, and rights of

investors, or those with whom [she] may sustain a confidential

relat ion, may not be entrusted to [her] in violation of Section

475.25(1)(o), Florida Statutes."

Respondent timely filed a request for a formal hearing to

contest paragraphs 5, 7, 8, 12, 14, 15, and 16 of the

Administrative Complaint. Respondent's request was filed with

the Division of Administrative Hearings for assignment of an

administrative law judge. The request was designated case

number 02 - 3677PL and was assigned to the undersigned. The final

hearing of this matter was scheduled for November 14, 2002, by

Notice of Hearing entered October 1, 2002.

Prior to the commencement of the final hearing, the parties

filed a Joint Pre - Hearing Stipulation which contains, among

other things, an admission by Respondent to the facts alleged in

paragraphs 1, 2, 3, 4, 6, 9, 10, 11, 13, and 17 of the

Administrative Complaint. Those admitted facts have been

accepted in this Recommended Order, to the extent relevant.

At the final hearing, Petitioner presented the testimony of

Dawn Luchik, an investigator for Petitioner. Pe titioner's

Exhibits, numbered 1 through 11, were admitted. Respondent

testified in her own behalf and Respondent's Exhibits numbered 1

through 3 were admitted, for the limited purposes reflected in

the one - volume Transcript of the proceedings.

Official re cognition was taken of Chapters 120, 455, and

475, Florida Statutes; Chapter 61J2, Florida Administrative

Code; and Florida decisional law pertaining to those provisions.

The Transcript was filed with the Division of

Administrative Hearings on December 9, 2002. By Corrected

Notice of Filing Transcripts entered December 11, 2002, the

parties were informed that their proposed recommended orders

were to be filed on or before January 8, 2003. Both parties

filed proposed recommended orders on January 8, 2003, and their

proposal's have been fully considered in entering this

Recommended Order.

FINDINGS OF FACT

1. Petitioner, the Department of Business and Professional

Regulation, Division of Real Estate (hereinafter referred to as

the "Department"), is the stat e agency charged with the duty to

prosecute administrative complaints pursuant to Section 20.125,

and Chapters 120, 455, and 475, Florida Statutes (2000).

2. At the times material to this proceeding, Shirley K.

Bemenderfer is and was a licensed Florida re al estate broker.

Ms. Bemenderfer's license number is 9995621. For her last

issued license, Ms. Bemenderfer was an active broker at

1801 Okeechobee Road, Fort Pierce, Florida 34950. She operated

under the trade name of Florida Properties of Fort Pierce.

Ms. Bemenderfer has held a real estate license for 30 years.

3. On December 9, 1999, Dawn Luchik, an investigator for

the Department, conducted an audit of Ms. Bemenderfer's property

management escrow account. The property management escrow

account mai ntained by Ms. Bemenderfer was a single account by

which she recorded the receipts and disbursements of all

property owners for whom she maintained property (hereinafter

collectively referred to as the "Property Owners").

4. Using information provided by Ms. Bemenderfer,

Ms. Luchik compared the "Trust Liability," or the net amount of

funds entrusted to Ms. Bemenderfer by the Property Owners, with

the net amount of money in the bank account in which

Ms Bemenderfer actually deposited the funds.

5. Based upo n information initially provided by

Ms. Bemenderfer, the Property Owners relevant to this proceeding

consisted of individuals identified as Thomas, James C. Kelley,

Pulliam, Esquivel, and Samaro. Based upon Ms. Bemenderfer's

property management escrow acc ount (hereinafter referred to as

the "Escrow Account"), the balances for the Property Owners as

of December 9, 1999, were as follows:

Thomas $2,565.49

Kelley 97.43

Pulliam 414.52

Esquivel 1,600.00

Samaro (179.86)

Total $4,497.5 8

6. Information provided by Ms. Bemenderfer indicated that

the total balance as of December 9, 1999, for the bank account

in which the funds of the Property Owners were maintained

(hereinafter referred to as the "Bank Account") totaled

$9,650.44.

7. A n umber of checks which were written and reflected in

the Escrow Account had not yet cleared the Bank Account and,

therefore, these checks were totaled and added back to the

Escrow Account balance as of December 9, 1999. Those checks

(hereinafter referred t o as the "Outstanding Checks"), according

to the information provided by Ms. Bemenderfer, included the

following 1/:

Payee Check Number Amount__

Bemenderfer 5213 $125.00

Thomas 52?? 405.00

Paigon 5231 70.00

Samaro 481 1 630.36

Samaro 4969 795.77

Samaro 4576 137.46

Total $3,414.86

8. The amount of the Outstanding Checks, $3,414.86, was

added to the Escrow Account total, $4,497.58, to arrive at what

the Bank Account total should have refl ected: $7,912.44.

9. A comparison of the Bank Account balance of $9,650.44

with the adjusted Escrow Account of $7,912.44, reflected a large

discrepancy between the two accounts of $1,738.00. Because the

accounts did not balance, Ms. Luchik discussed the matter

further with Ms. Bemenderfer to give her an opportunity to

explain the cause of the discrepancy. In an effort to explain

the discrepancy, Ms. Bemenderfer gave Ms. Luchik additional

information concerning the portion of the Escrow Account

attributa ble to Samaro.

10. Based upon the modified information provided by

Ms. Bemenderfer to Ms. Luchik, Ms. Bemenderfer's records

indicated that the Samaro portion of the Escrow Account had a

positive balance of $119.96 rather than the negative balance of

($179 .86) initially reported by Ms. Bemenderfer. The modified

balance was caused by a number of payments from the account

which Ms. Bemenderfer reported had been made prior to

December 9, 1999. Additionally, the new information reflected

that three checks pre viously deducted from the Samaro account

had been added back because they had never been cashed by

Samaro. Those checks (hereinafter referred to as the "Three

Samaro Checks") consisted of the following:

Payee Check Number Amount__

Samaro 4811 630.36

Samaro 4969 795.77

Samaro 4576 137.46

Total $1,563.59

11. Ms. Luchik modified her calculations to reflect the

new positive balance in the Samaro portion of Escrow Account,

but failed to remove the Three Samaro Checks f rom the total of

the Outstanding Checks reflected in Finding of Fact 7. Using

the modified Samaro account balance, Ms. Luchik determined that

the total amount of the Escrow Account was $4,797.40.

Ms. Luchik them made the following calculation:

Escrow Acc ount Balance $4,797.40

Plus Outstanding Checks 3,414.86

Adjusted Escrow Account Balance $8,212.26

Compared to Bank Account Balance 9,650.44

Overage $1,438.18

12. The overage, or the amount of funds in the Bank

Account in excess of the amount recorded in the Escrow Account,

was reflected in an Office Inspection & Escrow/Trust Account

Audit Form issued by Ms. Luchik on December 9, 1999.

13. Ms. Bemenderfer signed the Office Inspection &

Escrow/Trust Account Audit Form. Ms. Bemenderfer was unable to

explain why there was an overage.

14. The evidence at hearing proved that Ms. Luchik's

calculation of the overage on December 9, 1999, was incorrect.

In fact, based upon the information provided to Ms. Luchik by

Ms. Bemenderfer during the audit, the overage was actually much

higher than determined by Ms. Luchik. The discrepancy was

caused by a simple mathematical error in Ms. Luchik's

calculations. Ms. Luchik correctly added the Three Samaro

Checks back to the Escrow Account to reflect th e corrected

portion of the account attributable to Samaro but she had

already added those same three checks back to the Escrow Account

as part of the Outstanding Check balance. Therefore, the amount

of the Three Samaro Checks was added to the Escrow Accou nt

twice, inflating the balance of the Escrow Account by the amount

of the Three Samaro Checks, or $1,563.59.

15. When the Three Samaro Checks are correctly removed

from the Outstanding Check amount, the actual overage on

December 9, 1999, based upon the information provided by

Ms. Bemenderfer was actually much higher than determined by

Ms. Luchik:

Escrow Account Balance $4,797.40

Plus Outstanding Checks:

Amount Used by Ms.

Luchik $3,414.86

Reduced by the Three

Samaro Checks 1,563.59 1,851.27

Adjusted Escrow Account Balance $6,648.67

Compared to Bank Account Balance 9,650.44

Overage $3,001.77

16. Based upon the best information available to the

Department as of December 9, 1999, Ms. Bemenderfer appeared to

have $3,001.77 in her Bank Account in excess of the amount of

money she was holding in the Escrow Account for the Property

Owners. The evidence failed to prove where the purported excess

money came from or who it belonged to. The evidence also failed

to prove that the excess amount was in any way caused by

Ms. Bemenderfer for any reason other than her simple negligence

or incompetence.

17. The December 9, 1999, audit also discovered, based

upon records provided by Ms. Bemenderfer, that Ms. Bemenderfer's

records of the individual Property Owner's accounts which make

up the Escrow Account, often reflected a negative balance. A

negative balance indicates that amounts have been expended on

behalf of an individual Property Owner in excess of funds

received for that individu al Property Owner. Ms. Bemenderfer

was unable to explain the negative balances.

18. At the request of Ms. Bemenderfer, Ms. Luchik returned

to conduct a second audit of her accounts on April 12, 2000. At

this time, Ms. Bemenderfer had closed the Bank Acc ount, account

number 664413 (hereinafter referred to as the "Original Bank

Account"), and opened a new one, account number 1498797

(hereinafter referred to as the "New Bank Account").

19. As to the Original Bank Account, Ms. Bemenderfer

reported that ther e was no trust fund liability in the Escrow

Account. The balance of the Original Bank Account, however,

reflected a shortage in the account as of April 11, 2000, of

$473.44, apparently reflecting that she had theoretically

disbursed $473.44 more than she had received on behalf of the

Property Owners.

20. Apparently realizing she had a negative balance in the

Original Bank Account, Ms. Bemenderfer deposited $500.00 in the

account on the day of the audit, April 12, 2000. Therefore,

instead of reflecting a shortage of $473.44 when Ms. Luchik

began the audit, the Original Bank Account reflected an overage

in the account of $26.56. This amount was reflected by

Ms. Luchik in an Office Inspection & Escrow/Trust Account Audit

Form completed on April 12, 2000. M s. Bemenderfer was unable to

explain why there was a $473.44 shortage in the Original Bank

Account, what the $500.00 deposit she made was attributable to,

or why the account ended up with a $26.56 overage.

21. Based upon the best information available to the

Department as of April 12, 2000, Ms. Bemenderfer appeared to

have $26.56 in the Original Bank Account in excess of the amount

of money she had received and disbursed to the Property Owners

from the Escrow Account. The evidence also proved that the

exc ess was caused by a deposit of $500.00 made by

Ms. Bemenderfer. Finally, the evidence failed to prove that the

overage or shortage was in any way caused by Ms. Bemenderfer for

any reason other than her simple negligence or incompetence.

22. The April 12, 2000, audit also determined that there

was a $124.91 overage in the New Bank Account, which

Ms. Bemenderfer was unable to explain.

23. Based upon the best information available to the

Department as of April 12, 2000, Ms. Bemenderfer appeared to

have $124 .91 in her New Bank Account in excess of the amount of

money she was holding in the Escrow Account for the Property

Owners. The evidence failed to prove where the purported excess

money came from or who it belonged to. The evidence also failed

to prove t hat the excess amount was in any way caused by

Ms. Bemenderfer for any reason other than her simple negligence

or incompetence.

24. Monthly reconciliation statements which

Ms. Bemenderfer completed were also reviewed by Ms. Luchik

(hereinafter referred to as the "Reconciliations"). There are

numerous overages and shortages reflected in the

Reconciliations. Ms. Bemenderfer failed to provide an written

explanation in the Reconciliations for the overages or shortages

and she failed provide a written explana tion in the

Reconciliations for the correction action that would be taken to

eliminate the overages or shortages.

25. In conclusion, Ms. Bemenderfer failed to maintain her

Escrow Accounts in a reasonable, understandable fashion as of

December 9, 1999, and April 12, 2000. Her accounts simply do

not balance. Ms. Bemenderfer's accounts as of December 9, 1999,

and April 12, 2000, reflect the negligent and incompetent manner

in which the accounts had been maintained. The evidence failed

to prove, however, an y intentional wrong on her part or that

Ms. Bemenderfer benefited in any way from the manner in which

the accounts were maintained.

26. On May 19, 1999, the Florida Real Estate Commission

adopted a stipulation signed by Ms. Bemenderfer in settlement of

an Administrative Complaint issued against her on April 21,

1998. In the April 21, 1998, Administrative Complaint it was

alleged an audit conducted in 1997 had revealed an overage of

$1,731.36 in Ms. Bemenderfer's bank account, that she had failed

to prepar e Reconciliations, and that there were shortages in the

account of Ron Cason, even though the overall account balance

showed an overage. Pursuant to the terms of the stipulation,

Ms. Bemenderfer admitted the factual allegations of the

Administrative Compl aint, agreed that those allegations

constituted the violations alleged, and agreed to pay a

$1,000.00 fine and costs, serve a one - year probation period, and

attend a seven - hour escrow management course.

CONCLUSIONS OF LAW

27. The Division of Administrati ve Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2000).

28. In the Administrative Complaint, the Department seeks

to impose penalties against M s. Bemenderfer including suspension

or revocation of her license and/or the imposition of an

administrative fine. The Department, therefore, has the burden

of proving the allegations of the Administrative Complaint by

clear and convincing evidence. Depar tment of Banking and

Finance, Division of Securities and Investor Protection v.

Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987) ); and Nair v. Department

of Business & Professional Regulation , 654 So. 2d 205, 207 (Fla.

1st DCA 1995).

29. In Evans Packing Co. v. Department of Agriculture and

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

1989), the court defined "clear and convincing evidence" as

follows:

[C]lear and convincing evidence require s

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

evidence must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact the firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983).

30. Section 475.25, Florida Statutes (1999), provides that

disciplinary action may be taken against a real estate broker if

it is found that the broker has committed certain enumerated

offenses. In this matter, it has been alleged that

Ms. Bemenderfer committed the o ffenses described in Section

475.25(1)(b), (d)1, (k), and (o), Florida Statutes, which

provide, in pertinent part:

(b) Has been guilty of . . . culpable

negligence, or breach of trust in any

business transaction in this state . . . .

. . . .

(d)1 Has failed to account or deliver

funds to any person . . . .

. . . .

(k) Has failed, if a broker, to

immediately place, upon receipt, any money,

fund, deposit, check, or draft entrusted to

her or him by any person dealing with her or

him as a broke r in escrow with a title

company, banking institution, credit union,

or savings and loan association located and

doing business in this state, or to deposit

such funds in a trust or escrow account

maintained by her or him with some bank,

credit union, or s avings and loan

association located and doing business in

this state, wherein the funds shall be kept

until disbursement thereof is properly

authorized . . . .

. . . .

(o) Has been found guilty, for a second

time, of any misconduct that warrants her or

his suspension or has been found guilty of a

course of conduct or practices which show

that she or he is incompetent, negligent,

dishonest, or untruthful that the money,

property, transactions, and rights of

investors, or those with whom she or he may

sustain a confidential relation, may not

safely be entrusted to her or him.

31. It has also been alleged that Ms. Bemenderfer violated

Section 475.25(1)(e), Florida Statutes, which includes the

offense of having "violated any of the provisions of

[Chapte r 475] or any lawful order or rule made or issued under

the provisions of [Chapter 475] or chapter 455." In particular,

the Department has alleged that Ms. Bemenderfer violated Rule

61J2 - 14.012(2) and (3), Florida Administrative Code. That Rule

establish es requirements concerning a broker's responsibility to

complete Reconciliations.

32. Being penal in nature, Section 475.25, Florida

Statutes, “must be construed strictly, in favor of the one

against whom the penalty would be imposed.” Munch v. Departmen t

of Professional Regulation, Div. of Real Estate , 592 So. 2d

1136, 1143 (Fla. 1st DCA 1992).

33. Among other arguments raised by Ms Bemenderfer in her

proposed recommended order, she has argued that the Department

failed to prove the factual allegations of the Administrative

Complaint. In particular, Ms. Bemenderfer has argued:

a. The Administrative Complaint alleged that the overage

as of December 9, 1999, was $1,438.18 while the evidence proved

that the overage was actually $3,001.77; and

b. The Admi nistrative Complaint alleged that on April 12,

2000, there was a shortage of $473.44 between the Old Bank

Account and the Escrow Account when the evidence proved that

there was a overage of $26.50.

34. There is no dispute that disciplinary action taken

ag ainst a broker may be based only on those offenses

specifically alleged in the administrative complaint. See

Cottrill v. Department of Insurance , 685 So. 2d 1371 (Fla. 1st

DCA 1996); Delk v. Department of Professional Regulation , 595

So. 2d 966, 967 (Fla. 5th DCA 1992); Kinney v. Department of

State , 501 So. 2d 129, 133 (Fla. 5th DCA 1987); and Hunter v.

Department of Professional Regulation , 458 So. 2d 842, 844 (Fla.

2nd DCA 1984).

35. With regard to the findings of the December 9, 1999,

audit, Ms. Bemen derfer relies on the allegations of paragraph 5

of the Administrative Complaint:

5. The audit revealed an overage of

$1438.18 in the property management escrow

account. A copy of the Audit report is

attached hereto and incorporated herein as

Exhibit 2.

Ms. Bemenderfer argues, that since the overage alleged

is $1,438.18, and not $3,001.77, the Department has

failed to prove its allegation concerning the

December 9, 1999, audit. This argument is rejected

for two reasons.

36. First, while Ms. Bemenderfer has suggested that the

Administrative Complaint must be read in a very "precise" and

"limited" manner, she had ignored the most "precise" and

"limited" reading of paragraph 5 of the Administrative

Complaint: it actually only required the Department to pro ve

that its "audit revealed an overage of $1438.18 in the property

management escrow account." The evidence in fact proved this

allegation; as a result of the audit on December 9, 1999, the

Department found that the overage was $1,438.18, just as

alleged. The actual overage of $3,001.77 was not proved until

hearing.

37. Secondly, and more importantly, Ms. Bemenderfer is

ignoring the total allegations of the Administrative Complaint

pertaining to this issue:

5. The audit revealed an overage of

$1438.18 in the property management escrow

account. A copy of the Audit report is

attached hereto and incorporated herein as

Exhibit 2.

6. Respondent was unable to explain the

reason for the overage.

. . . .

8. Respondent provided two conflicting

accou ntings of one owner's individual

account. One accounting displayed an

overage of $119.96. the other accounting,

dated one day earlier than the first

accounting, revealed a shortage of $179.86.

. . . .

While not as precise as they may have been, these a llegations

suggest what the facts have ultimately shown: Ms. Bemenderfer

has not been able to maintain her Escrow Account in such a way

that it balances with her Bank Account.

38. With regard to the findings of the April 12, 2000,

audit, Ms. Bemenderfer relies on the allegations of paragraph 12

of the Administrative Complaint:

12. The second audit revealed a $473.44

shortage in the old property management

account.

Ms. Bemenderfer argues, that since he evidence proved

there was an overage of $26.56, ra ther than a

shortage, the Department has failed to prove its

allegation concerning the April 12, 2000, audit. This

argument is also rejected.

39. Although not as precisely alleged as it could have

been, the Department added the following additional alleg ation

of fact concerning the April 12, 2000, audit:

13. After the second audit, Respondent

later deposited $500 in that account

resulting in an overage of $26.56. . . .

40. The evidence proved that there was an overage of

$26.56 on the date of the aud it, which was caused by an

unexplained deposit by Ms. Bemenderfer the same day of $500.00.

That deposit eliminated the $473.44 shortage alleged in the

Administrative Complaint. These facts are not, however,

materially inconsistent with the allegations of the

Administrative Complaint. The audit did, in fact, reveal a

shortage, but for an unexplained deposit by Ms. Bemenderfer, of

$473.44; and, although it occurred the same day rather than

after the second audit, the $26.56 overage proved at hearing is

als o alleged in the Administrative Complaint.

Count I: Culpable Negligence or Breach of Trust; Section

475.25(1)(b), Florida Statutes

41. In the Department's proposed recommended order, it has

been argued that Ms. Bemenderfer is guilty of culpable

negligenc e or breach of trust simply because Ms. Bemenderfer, as

part of the settlement of the Administrative Complaint issued

against her on April 21, 1998, she admitted to the facts alleged

and agreed that those facts supported the violations alleged.

The Depart ment goes on to argue that the facts she admitted,

which are similar to the facts in this case, were alleged to

constitute culpable negligence or breach of trust, just as in

this case. Therefore, the Department concludes that

Ms. Bemenderfer was "on actua l notice that [the facts of this

case] constituted [the same] violations [alleged in this case]."

This argument is rejected.

42. Whether Ms. Bemenderfer agreed previously as part of a

settlement that certain facts rise to the level of culpable

negligence or breach of trust does not support a conclusion that

the facts admitted actually come within the statutory violation.

In fact, they do not.

43. What the facts have established in this case is that

Ms. Bemenderfer simply does not know how to keep her bo oks in

such a way that they balance and that she has not been very

precise in filling out the monthly Reconciliations. The

evidence proves that Ms. Bemenderfer has been incompetent and

simply negligent when it comes to balancing her books.

44. Simple neg ligence, which has been proved in this case,

does not, however, rise to the level of culpable negligence or

breach of trust. In Munch , 592 So. 2d at 1143 - 1144, the court

made the following observations about the first clause of

Section 475.25(1)(b), Flori da Statutes, which contains the terms

"culpable negligence" and "breach of trust":

It is clear that Section 475.25(1)(b) is

penal in nature. As such, it must be

construed strictly, in favor of the one

against whom the penalty would be imposed.

. . . R eading the first clause of Section

475.25(1)(b) . . . and applying to the words

used their usual and natural meaning, it is

apparent that it is contemplated that an

intentional act be proved before a violation

may be found. See Rivard v. McCoy , 212 So.

2d 672 (Fla. 1st DCA), cert. denied, 219 So.

2d 703 (Fla. 1968). [Emphasis in the

original].

45. The evidence in this case simply failed to prove that

Ms. Bemenderfer had any intention of not being able to balance

her Bank Account and Escrow Account.

46. Based upon the foregoing, it is concluded that the

evidence failed to prove that Ms. Bemenderfer is guilty of

culpable negligence, or breach of trust in any business

transaction in violation of Section 475.25(1)(b), Florida

Statutes.

Count II: Failure to Account or Deliver Funds; Section

475.25(1)(d)1, Florida Statutes

47. In its Proposed Recommended Order, the Department has

correctly conceded that the evidence failed to prove clearly and

convincingly that Ms. Bemenderfer is guilty of having failed to

account or deliver funds to any person in violation of Section

475.25(1)(d)1, Florida Statutes.

48. Based upon the foregoing and the evidence presented,

it is concluded that the evidence failed to prove that

Ms. Bemenderfer is guilty of failure to account or deliver funds

in violation of Section 475.25(1)(d)1, Florida Statutes.

Count III: Failure to Maintain Trust Funds; Section

475.25(1)(k), Florida Statutes

49. While the evidence proved that Ms. Bemenderfer failed

to properly keep track of funds under her control, no evidence

was presented to prove the proper balance of the accounts. It

cannot, therefore, be concluded that the amount of funds

Ms. Bemenderfer had in her Bank Account was not the correct

amount of trust funds she was required to maintain . Without

such proof, and in light of the fact that the evidence only

proved that Ms. Bemenderfer may have had more cash in her

account than necessary, it cannot be concluded that she has

failed to maintain funds entrusted to her.

50. Based upon the fore going, it is concluded that the

evidence failed to prove that Ms. Bemenderfer is guilty of

failure to maintain trust funds in violation of Section

475.25(1)(b), Florida Statutes.

Count IV: Failure to Properly Prepare Monthly Escrow

Statement - Reconciliatio ns; Section 475.25(1)(e), Florida

Statutes and Rule 61J2 - 14.012(2) and (3), Florida

Administrative Code

51. In her Proposed Recommended Order, Ms. Bemenderfer has

correctly conceded that the evidence proved clearly and

convincingly that she is guilty of having violated Section

475.25(1)(e), Florida Statutes, by having failed to complete

Reconciliations in compliance with Rule 61J2 - 14.012(2) and (3),

Florida Administrative Code.

52. Based upon the foregoing and the evidence presented,

it is concluded that the evidence proved that Ms. Bemenderfer is

guilty of failure to properly prepare the monthly escrow

statement - reconciliations in violation of Rule 61J2 - 14.012(2)

and (3), Florida Administrative Code, which constitutes a

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

Count V: Found Guilty for a Second Time of Misconduct

Warranting Suspension or Found Guilty of a Course of

Conduct or Practices Which Shows Incompetence, Negligence,

Dishonesty, or Untruthfulness; Section 475.25(1)(o),

Florida Statutes

53. To be found guilty of engaging in a harmful course of

conduct in violation of Section 475.25(1)(o), Florida Statutes,

a licensee must be shown to have committed wrongful acts in

connection with more than one transaction. Kopf v. Florida Real

Estate Commission , 379 So. 2d 1327, 1329 (Fla. 3d DCA 1980).

Such a showing was made here.

54. Ms. Bemenderfer has been found to be guilty of the

same type of violations pursuant both to the April 21, 1998,

Administrative Complaint and in this case. While the violations

do not involve dishonesty or untruthfulness, the violations do

involve incompetence and negligence. Her course of conduct

suggests that the money, property, transactions, and rights of

investors, or those with whom she may sustain a confidentia l

relation, may not safely be entrusted to her.

55. Based upon the foregoing, it is concluded that the

evidence has proved that Ms. Bemenderfer is guilty, for a second

time, of a course of conduct or practices which show that she is

so incompetent or negl igent that the money, property,

transactions, and rights of investors, or those with whom she

may sustain a confidential relation, may not safely be entrusted

to her in violation of Section 475.25(1)(o), Florida Statutes.

Penalty

56. A range of disciplina ry guidelines for violations of

Chapters 455 or 475, Florida Statutes, has been adopted in Rule

61J2 - 24.001, Florida Administrative Code.

57. For a violation of Section 475.25(1)(e), Florida

Statutes, the suggested penalty ranges from an eight - year

suspen sion to revocation and a $1,000.00 fine. Rule 61J2 -

24.001(1)(f), Florida Administrative Code. For a violation of

Section 475.25(1)(o), Florida Statutes, the suggested penalty

ranges from a $500.00 fine and a one - year suspension to

revocation. Rule 61J2 - 24.001(1)(p), Florida Administrative

Code.

58. The Department in its Proposed Recommended Order has

suggested a 90 - day suspension of Ms. Bemenderfer's license.

This recommendation was based upon the Department's conclusion

that four of the five counts of the Administrative Complaint had

been proved. In her Proposed Recommended Order, Ms. Bemenderfer

has suggested an administrative fine of $500.00 and six months'

probation, during which time, Ms. Bemenderfer would be required

to complete a four - hour escro w management course prescribed by

the Florida Real Estate Commission and attend one Florida Real

Estate Commission meeting.

59. Rule 61J2 - 24.001(4), Florida Administrative Code,

provides for a consideration of aggravating or mitigating

circumstances demon strated by clear and convincing evidence by

the petitioner or respondent in a proceeding before the Division

of Administrative Hearings. If demonstrated, the guidelines of

the rule may be deviated from. Advance notice of intent to

present evidence of agg ravating or mitigating circumstances is

required to be given no less than seven days before the formal

hearing.

60. The aggravating or mitigating circumstances that may

be considered include, but are not limited to, the following:

1. The severity of th e offense.

2. The degree of harm to the consumer or

public.

3. The number of counts in the

Administrative Complaint.

4. The number of times the offenses

previously have been committed by the

licensee.

5. The disciplinary history of the

licensee .

6. The status of the licensee at the time

the offense was committed.

7. The degree of financial hardship

incurred by a licensee as a result of the

imposition of a fine or suspension of the

license.

8. Violation of the provision of Chapter

475, F lorida Statutes, where in a letter of

guidance as provided in s. 455.225(3),

Florida Statutes, previously has been issued

to the licensee.

61. Neither party gave notice of intent to present

evidence of aggravating or mitigating circumstances in this

case .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the a final order be entered finding

that Shirley K. Bemenderfer violated Section 475.25(1)(e) and

(o), Florida Statutes; requiring that she pay an admi nistrative

fine of $500.00; and that she be placed on probation for one

year during the first three months of which she shall

successfully complete at least a four - hour escrow management

course prescribed by the Florida Real Estate Commission.

DONE AND EN TERED this 29th day of January, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

LARRY J. SARTIN

Administrative Law Judge

Divis ion 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 29th day of January, 2003.

ENDNOTE

1/ The payee, check number, and the amount of the checks are

taken from Petitioner's Exhibit 7. The names of some of the

payees and check numbers have been estimated due to the poor

quality of the exhibit. Any inaccuracy in the name of the payee

or check numbers has no baring on the relevant facts of this

case.

COPIES FURNISHED :

Lorenzo Level, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N802

Orlando, Florida 32801

James R. Mitchell, Esquire

Baker & Hostetler LLP

200 South Orange Avenue, Suite 2300

Orlando, Florida 32801

Nancy P. Campiglia, Chief Attorney

Department of Business and

Professional Regulation

Division of Real Estate

40 0 West Robinson Street, Suite 802, North

Orlando, Florida 32801

Buddy Johnson, Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 802, North

Orlando, Florida 32801

Hardy L. Roberts, III , General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

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 should be filed with the agency that

will issue the final order in this case.