09-004235 Department Of Business And Professional Regulation, Division Of Real Estate vs. Clifford Altemare And Altema Consulting Co., Llc Status: Closed Recommended Order on Wednesday, May 12, 2010.

Summary: Failure to deposit funds into escrow account or to return deposit upon demand requires discipline against licenses.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-4235

)

CLIFFORD ALTEMARE AND ALTEMA )

CONSULTING CO., LLC, )

)

Respondents. )

)

RECOMMENDED ORDER

On October 16, 2009, and April 6, 2010, an administrative

hearing in this case was held in Clearwater, Florida, before

William F. Quattlebaum, Administrative Law Judge, Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801

For Respondents: Clifford Altemare, pro se

Altema Consulting Co., LLC

1047 Iroquois Street

Clearwater, Florida 33755

STATEMENT OF THE ISSUES

The issues in the case are whether the allegations of the

Administrative Complaint are correct, and, if so, what penalty

should be imposed.

PRELIMINARY STATEMENT

By an Administrative Complaint dated October 20, 2008, the

Department of Business and Professional Regulation, Division of

Real Estate (Petitioner), alleged that Clifford Altemare and

Altema Consulting Co., LLC (Respondents), represented a seller

in a real estate transaction, failed to properly escrow funds

received in connection with the proposed sale, and then failed

to return the escrowed funds to the intended buyer when the

transaction did not proceed to closing.

The Respondents filed a request for a formal administrative

hearing. The Petitioner forwarded the request to the Division

of Administrative Hearings, which scheduled the formal hearing.

The case was transferred to the undersigned Administrative

Law Judge (ALJ) on October 2, 2009. On the same day, but prior

to the transfer of the case, the previously-assigned ALJ granted

a motion to withdraw filed by legal counsel for the Respondents.

At the commencement of the hearing, the Respondents asserted

that substitute legal counsel was being obtained. The

Respondents also asserted that no notice had been provided by

previous legal counsel of a deposition taken, after the motion

to withdraw was granted, by the Petitioner for use at the

hearing and that, accordingly, the Respondents had not attended

or been represented at the deposition. The hearing was recessed

to permit substituted legal counsel to be obtained, and the

Petitioner was directed to reconvene the deposition to permit

the Respondents' new counsel to cross-examine the deposed

witness.

The Respondents failed to obtain substitute legal counsel,

and the deposition was eventually reconvened to permit the

Respondents an opportunity to cross-examine the deponent.

Following due notice, the hearing resumed and was completed

on April 6, 2010.

At the hearing, the Petitioner presented the testimony of

one witness and had Exhibits 1 through 5 (including the

deposition testimony of an additional witness) admitted into

evidence. The Respondents presented the testimony of one

witness (Clifford Altemare) and had Exhibits 1 through 5

admitted into evidence.

The Transcript of the October 16, 2009, hearing was filed

on October 27, 2009. The Transcript of the April 6, 2010,

hearing was filed on April 9, 2010.

Both parties filed Proposed Recommended Orders that have

been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times material to this case, Respondent Clifford

Altemare (Mr. Altemare) was a licensed real estate broker,

holding Florida license BK-3062479.

2. At all times material to this case, Respondent Altema

Consulting Co., LLC (ACC), was a licensed real estate brokerage,

holding Florida license CQ-1024239. Clifford Altemare was the

owner, qualifying broker, and officer for ACC.

3. On August 21, 2006, Mr. Altemare signed an agreement to

represent for sale hotel property owned by Sweet Hospitality,

LLC. The agreement stated that Mr. Altemare would receive an

unidentified commission based on the sales price.

4. On December 12, 2006, Mr. Altemare received an escrow

deposit of $25,000 from Rakesh Rathee, who signed an agreement

to purchase the hotel.

5. The $25,000 deposit was transferred by wire from Rakesh

Rathee into a corporate operating account of ACC.

6. Mr. Altemare failed to place the $25,000 escrow deposit

into an ACC escrow account.

7. Apparently, because the seller decided not to sell the

property, the proposed sale did not close, and the buyer

demanded the return of the $25,000 deposit.

8. There is no credible evidence that the seller has made

any claim upon the deposit.

9. Mr. Altemare has refused to return the $25,000 deposit

to Rakesh Rathee.

10. At the hearing, Mr. Altemare asserted that the deposit

has not been returned to the buyer because of uncertainty as to

whom the deposit should be refunded. There was no credible

evidence offered at the hearing to support the assertion that

someone other than Rakesh Rathee should received a refund of the

$25,000 deposit.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2009).

12. The Petitioner is the state agency charged with the

regulation of real estate brokers and agencies in the State of

Florida. See Ch. 475, Fla. Stat. (2009).

13. The Administrative Complaint filed in this case

alleged that: Mr. Altemare was licensed and operating as the

qualifying broker and officer of ACC; Mr. Altemare accepted an

escrow deposit of $25,000 from the buyer of the property; the

funds were not properly deposited into an ACC escrow account;

the sale did not proceed to closing; the buyer demanded return

of the deposit; and Mr. Altemare had failed to return the

deposit to the buyer.

14. The Petitioner has the burden of proving the

allegations set forth in the Administrative Complaint by clear

and convincing evidence. Department of Banking and Finance v.

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

Turlington , 510 So. 2d 292 (Fla. 1987). The burden has been

met.

15. In relevant part, Section 475.25, Florida Statutes

(2006), provides as follows:

(1) The commission may deny an application

for licensure, registration, or permit, or

renewal thereof; may place a licensee,

registrant, or permittee on probation; may

suspend a license, registration, or permit

for a period not exceeding 10 years; may

revoke a license, registration, or permit;

may impose an administrative fine not to

exceed $5,000 for each count or separate

offense; and may issue a reprimand, and any

or all of the foregoing, if it finds that

the licensee, registrant, permittee, or

applicant:

* * *

(b) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or device, culpable

negligence, or breach of trust in any

business transaction in this state or any

other state, nation, or territory; has

violated a duty imposed upon her or him by

law or by the terms of a listing contract,

written, oral, express, or implied, in a

real estate transaction; has aided,

assisted, or conspired with any other person

engaged in any such misconduct and in

furtherance thereof; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme. It is immaterial to the guilt of

the licensee that the victim or intended

victim of the misconduct has sustained no

damage or loss; that the damage or loss has

been settled and paid after discovery of the

misconduct; or that such victim or intended

victim was a customer or a person in

confidential relation with the licensee or

was an identified member of the general

public.

* * *

(d)1. Has failed to account or deliver to

any person, including a licensee under this

chapter, at the time which has been agreed

upon or is required by law or, in the

absence of a fixed time, upon demand of the

person entitled to such accounting and

delivery, any personal property such as

money, fund, deposit, check, draft, abstract

of title, mortgage, conveyance, lease, or

other document or thing of value, including

a share of a real estate commission if a

civil judgment relating to the practice of

the licensee's profession has been obtained

against the licensee and said judgment has

not been satisfied in accordance with the

terms of the judgment within a reasonable

time, or any secret or illegal profit, or

any divisible share or portion thereof,

which has come into the licensee's hands and

which is not the licensee's property or

which the licensee is not in law or equity

entitled to retain under the circumstances.

However, if the licensee, in good faith,

entertains doubt as to what person is

entitled to the accounting and delivery of

the escrowed property, or if conflicting

demands have been made upon the licensee for

the escrowed property, which property she or

he still maintains in her or his escrow or

trust account, the licensee shall promptly

notify the commission of such doubts or

conflicting demands and shall promptly:

a. Request that the commission issue an

escrow disbursement order determining who is

entitled to the escrowed property;

b. With the consent of all parties, submit

the matter to arbitration;

c. By interpleader or otherwise, seek

adjudication of the matter by a court; or

d. With the written consent of all parties,

submit the matter to mediation. The

department may conduct mediation or may

contract with public or private entities for

mediation services. However, the mediation

process must be successfully completed

within 90 days following the last demand or

the licensee shall promptly employ one of

the other escape procedures contained in

this section. Payment for mediation will be

as agreed to in writing by the parties. The

department may adopt rules to implement this

section.

If the licensee promptly employs one of the

escape procedures contained herein and

abides by the order or judgment resulting

therefrom, no administrative complaint may

be filed against the licensee for failure to

account for, deliver, or maintain the

escrowed property. Under certain

circumstances, which the commission shall

set forth by rule, a licensee may disburse

property from the licensee's escrow account

without notifying the commission or

employing one of the procedures listed in

sub-subparagraphs a.-d. If the buyer of a

residential condominium unit delivers to a

licensee written notice of the buyer's

intent to cancel the contract for sale and

purchase, as authorized by s. 718.503, or if

the buyer of real property in good faith

fails to satisfy the terms in the financing

clause of a contract for sale and purchase,

the licensee may return the escrowed

property to the purchaser without notifying

the commission or initiating any of the

procedures listed in sub-subparagraphs a.-

d. . . .

* * *

(e) Has violated any of the provisions of

this chapter or any lawful order or rule

made or issued under the provisions of this

chapter or chapter 455.

16. Florida Administrative Code Rule 61J2-14.010 provides

as follows:

61J2-14.010 Real Estate Broker.

(1) Every broker who receives from sales

associates, principals, prospects, or other

persons interested in any real estate

transaction, any deposit, fund, money,

check, draft, personal property, or item of

value shall immediately place the same in a

bank, savings and loan association, trust

company, credit union or title company

having trust powers, in an insured escrow or

trust account. The broker must be a

signatory on all escrow accounts. If the

brokerage entity has more than one broker

licensee, then one broker licensee may be

designated as the signatory. If the deposit

is in securities, intended by the depositor

to be converted into cash, the conversion

shall be made at the earliest practical

time, and the proceeds shall be immediately

deposited in said account.

(2) A broker may place and maintain up to

$1,000 of personal or brokerage funds per

each sales escrow account. A broker may

place and maintain up to $5,000 of personal

or brokerage funds per each property

management escrow account. Personal or

brokerage funds in any escrow account shall

not exceed $5,000 per account. A broker

shall be provided a reasonable amount of

time to correct escrow errors if there is no

shortage of funds and such errors pose no

significant threat to economically harm the

public. For purposes of this subsection,

reasonable amount of time shall be defined

as 30 days from the date the last

reconciliation statement was performed or

should have been performed.

17. By failing to properly place the $25,000 deposit into

an escrow account, the Respondents violated Florida

Administrative Code Rule 61J2-14.010 and, thereby, violated

Subsections 475.25(1)(b) and (e), Florida Statutes (2006).

18. By failing to return, upon demand, the $25,000 deposit

to the prospective purchaser from whom the deposit was received,

the Respondents have violated Subsection 475.25(1)(d), Florida

Statutes (2006). There is no credible evidence that the

Respondents notified the Petitioner, as required by statute, of

"doubts or conflicting demands" related to any disputed return

of the $25,000 deposit.

19. Florida Administrative Code Rule 61J2-24.001 sets

forth guidelines adopted by the Petitioner relevant to the

violations of statute and rule set forth herein and provides the

basis for the following recommended penalty. The guidelines do

not include return of improperly retained escrow funds within

the range of appropriate penalties.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Business and

Professional Regulation, Division of Real Estate, enter a final

order, stating that the Respondents violated Subsections

Administrative Code Rule 61J2-14.010 and imposing a $15,000

administrative fine and a five-year suspension of licensure.

DONE AND ENTERED this 12th day of May, 2010, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 12th day of May, 2010.

COPIES FURNISHED :

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801

Clifford Altemare

Altema Consulting Co., LLC

1047 Iroquois Street

Clearwater, Florida 33755

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N802

Orlando, Florida 32801

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.