10-002690 Department Of Business And Professional Regulation, Division Of Real Estate vs. Linda Johanna Iverson And Sanctum Stay Corp. Status: Closed Recommended Order on Monday, September 27, 2010.

Summary: Real estate broker and real estate broker corporation failed to deliver deposit refund to client and failed to provide excrow account or transaction records to Division, violating 475.25(1)(d)1 and 475.5051. Recommend $4,000 fine and 5 years' suspension.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 10 - 2690

)

LINDA JOHANNA IVERSON AND )

SANCTUM STAY CORP., )

)

Respondents. )

_ _______________________________ )

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on July 13, 2010, by video teleconference, with the parties

app earing in Fort Lauderdale, Florida, before Patricia M. Hart,

a duly - designated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building - North Tower Suite N801

Orlando, Florida 32801

For Respondents: No appearance

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations alleged in

the Administrative Complaint dated December 22, 2009, and, if

so, the penalty that should be imposed.

PRELIMINARY STATEMENT

In a si x - count Administrative Complaint dated December 22,

2009, the Department of Business and Professional Regulation,

Division of Real Estate ("Division"), charged Linda Johanna

Iverson and Sanctum Stay Corporation with having failed to

"account or deliver fun ds," in violation of

Section 4 7 5. 2 5(1)(d)1., Florida Statutes (2009), 1 (Counts One and

Four); having "obstructed or hindered in any manner the

enforcement of Chapter 475, Florida Statutes, or the performance

of any lawful duty by any person acting under th e authority of

Chapter 475," in violation of Section 475.42(1)(i), Florida

Statutes, and, "therefore, in violation of

Section 475.25(1)(e)[,] Florida Statutes," (Counts Two and

Five); and with having failed "to preserve and make available to

the Petitioner all books records, and supporting documents" and

having failed "to keep accurate account of all trust fund

transactions," in violation of Florida Administrative Code

Rule 61J2 - 14.012(1) and Section 475.5051, Florida Statutes, and

"therefore, in violation of Section 475.25(1)(e), Florida

Statutes" (Counts Three and Six). These statutory violations

were predicated on the factual allegations in the Administrative

Complaint that Ms. Iverson failed to return to a tenant a

deposit of $1,000.00 and failed to pro vide business records to

the Petitioner's representative.

Ms. Iverson timely requested an administrative hearing, and

the Division transmitted the matter to the Division of

Administrative Hearings for assignment of an administrative law

judge. At the fina l hearing, the Division presented the

testimony of Krystal Cordo, an investigator employed by the

Division, and Sharon Hendee, the complainant, who testified by

telephone. Petitioner's Exhibits 1 through 8 were offered and

received in evidence. Ms. Ivers on did not make an appearance at

the final hearing, either in person or through representation.

The one - volume transcript of the proceedings was filed with

the Division of Administrative Hearings on August 3, 2010, and

the Division timely filed proposed fi ndings of fact and

conclusions of law, which have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

fol lowing findings of fact are made:

1. The Division is the government licensing and regulatory

agency with the responsibility and duty to investigate and

prosecute persons holding licenses and registrations as real

estate brokers and real estate broker corp orations. See

§ 475.021, Fla. Stat. The Florida Real Estate Commission

(ÐCommissionÑ) has the authority to impose discipline on persons

licensed pursuant to Chapter 475, Part I, Florida Statutes. See

§ 475.25, Fla. Stat.

2. At the times material to thi s proceeding, Ms. Iverson

was a real estate broker licensed in Florida, having been issued

license numbered 3184122. Sanctum Stay Corporation was a

corporation registered as a real estate broker in Florida,

having been issued license numbered 1032989.

3. Ms. Iverson operated as the qualifying broker and an

officer of Sanctum Stay Corporation, which was also known at the

time material to this proceeding as Equilect Capital, Inc.

("Equilect Capital").

4. In or about October 2008, Ms. Iverson, in her capaci ty

as a real estate broker, reached a verbal agreement with Sharon

Hendee whereby Ms. Iverson agreed to rent to Ms. Hendee a house

at 2880 Northeast 9th Street, Pompano, Florida, from January 24,

2009, through February 7, 2009.

5. Pursuant to the agreement, Ms. Hendee was to pay a

$1,000.00 refundable deposit on the house, and she wrote a check

dated October 24, 2008, to Equilect Capital in the amount of

$1,471.81. On January 24, 2009, Ms. Hendee's bank records

reflect a transa ction in the amount of $3,246.09, payable to

Equilect Capital, which was the final payment for the rental of

the house at 2880 Northeast 9th Street, Pompano, Florida.

6. In an electronic mail dated January 8, 2009,

Ms. Iverson confirmed that she had recei ved payment for the

rental commencing January 24, 2009.

7. Ms. Hendee and/or her relatives occupied the rental

house during the agreed - upon period of time in January and

February 2009.

8. Ms. Hendee did not receive a refund of her $1,000.00

deposit from Ms. Iverson, and, in or about April 2009, she filed

a complaint with the division.

9 . In an electronic mail exchange between Ms. Iverson and

Ms. Hendee that took place on May 14, 2009, Ms. Iverson stated

that she had set up a list of people she needed to pay, and she

included the list in the electronic mail. Ms. HendeeÓs name was

on the list, followed by the notation Ð$1,000.00 stay 24 Jan -

7 Feb 2009.Ñ 2 Ms. Iverson asked Ms. Hendee for her address as

part of the electronic mail exchange on May 14, 2009 , explaining

that she needed Ms. HendeeÓs mailing address so she could send

Ms. Hendee a check. Ms. Hendee provided Ms. Iverson with her

address by electronic mail on May 14, 2009. As of the final

hearing, Ms. Hendee had not received a refund of her $1,0 00.00

deposit.

10. As part of the DivisionÓs investigation of Ms.

HendeeÓs complaint, Krystal Cordo, the DivisionÓs investigator,

met with Ms. Iverson and her husband on September 4, 2009, at

the offices of the Sanctum Stay Corporation. At the meeting,

M s. Iverson told Ms. Cordo that she had opened an escrow account

for one month to handle Ðthis specific transactionÑ but that the

account was closed at the time of the September 4, 2009,

meeting. Ms. Iverson also told Ms. Cordo that she Ðdid not have

copie s of her bank/reconciliation statements or a copy of the

transaction file.Ñ 3 Ms. Cordo asked Ms. Iverson to provide her

with a statement showing that the account was closed.

11. During the meeting on September 4, 2009, Ms. Iverson

signed a Division form entitled ÐOffice Inspection &

Escrow/Trust Account Audit Form,Ñ on which Ms. Cordo noted:

ÐBroker will make available her bank statements/reconciliation

for when she did hold escrow no later than 9 - 11 - 09.Ñ 4

12. Ms. Cordo made a follow - up visit to the off ices of

Sanctum Stay Corporation on September 11, 2009, to obtain the

requested documents. Ms. IversonÓs husband was present and

advised Ms. Cordo that Ms. Iverson was not in the office.

13. Ms. Iverson had not, at the time of the final hearing,

provided the requested bank statements or reconciliations to

Ms. Cordo, despite telephone calls Ms. Cordo made to

Ms. Iverson, which Ms. Iverson did not return, and electronic

mail messages sent to Ms. Cordo by Ms. Iverson.

14. Neither Ms. Iverson nor Sanctum Sta y Corporation has

previously been the subject of a disciplinary action by the

Florida Real Estate Commission.

CONCLUSIONS OF LAW

15. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

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

Florida Statutes (2010).

16. In its Administrative Complaint, the Division seeks to

impose penalties against Ms. Iverson and Sanctum Stay

Corporation that include suspension or revocation of

Ms. Iverson's and Sanctum Stay Corporation's licenses and/or the

imposition of an administrative fine. Therefore, the Division

has the burden of proving by clear and convincing evidence that

Ms. Iverson and Sanctum Stay Corporation committed the

violations alleged in t he Administrative Complaint. See

Department 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).

17. Clear and convincing evidence i s the proper standard

in license revocation proceedings because they are penal in

nature and implicate significant property rights. See Osborne

Stern , 670 So. 2d at 935. 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

requires that the evidence must be found to

be credible; the facts to which the

witnesses testify must be distinctly

rememb ered; 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 of 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).

18. Judge Sharp, in her dissenting opinion in Walker v.

Florida Department of Business and Professional Regulation , 705

So. 2d 6 52, 655 (Fla. 5th DCA 1998)(Sharp, J., dissenting),

reviewed several pronouncements on clear and convincing

evidence:

Clear and convincing evidence requires more

proof than preponderance of evidence, but

less than beyond a reasonable doubt. In re

Inquiry Concerning a Judge re Graziano ,

696 So. 2d 744 (Fla. 1997). It is an

intermediate level of proof that entails

both qualitative and quantative [sic]

elements. In re Adoption of Baby E.A.W. ,

658 So. 2d 961, 967 (Fla. 1995), cert.

denied , 516 U.S. 1051, 116 S. Ct. 719, 133

L. Ed. 2d 672 (1996). The sum total of

evidence must be sufficient to convince the

trier of fact without any hesitancy. Id.

It must produce in the mind of the trier of

fact a firm belief or conviction as to the

truth of the allegatio ns sought to be

established. Inquiry Concerning Davie , 645

So. 2d 398, 404 (Fla. 1994).

19. In the Administrative Complaint, the Division charged

Ms. Iverson and Sanctum Stay Corporation in Counts One and Four,

respectively, with having violated Section 475.25(1)(d)1.,

Florida Statutes; in Counts Two and Five, respectively, with

having violated Section 475.42(1)(i), Florida Statutes, and,

therefore, Section 475.25(e), Florida Statutes; and, in Counts

Three and Six, respectively, with having violat ed Florida

Administrative Code Rule 61J2 - 14.012 and Section 475.5015,

Florida Statutes, and, therefore, Section 475.25(e), Florida

Statutes.

20. Section 475.25, Florida Statutes, provides in

pertinent part:

(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 impo se 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:

* * *

(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

deliv ery, any personal property such as

money, fund, deposit, check, draft, abstract

of title, mortgage, conveyance, lease, or

other document or thing of value, . . . .

* * *

(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.

21. Section 475.42, Florida Statutes, provides in

pertinent part:

(1) VIOLATIONS. --

* * *

(i) A person may not 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.

Violations of Section 475.42(1), Florida Statutes, are

identified in Section 475.42(2), Florida Statutes, as second -

degree misdemeanors.

22. Section 475.5015, Florida Statutes, provides in

pertinent part:

Each broker shall keep and make available to

the department such books, accounts, and

records as will enable the department to

determine whether such broker is in

compliance with the provisions of this

chapter. Each broker shall preser ve 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 date 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 property management

agreement, rental or lease agreement, or any

other written or verbal agreement which

eng ages the services of the broker. . . .

Florida Administrative Code Rule 61J2 - 14.012, provides in

pertinent part:

(1) A broker who receives a deposit as

previously defined shall preserve and make

available to the BPR, or its authorized

representative, all deposit slips and

statements of account rendered by the

depository in which said deposit is placed,

together with all agreements between the

parties to the transaction. In addition,

the broker shall keep an accurate account of

each deposit transaction an d each separate

bank account wherein such funds have been

deposited. All such books and accounts

shall be subject to inspection by the DBPR

or its authorized representatives at all

reasonable times during regular business

hours.

23. As to Counts One and Four, based on the findings of

fact herein, the Division has met its burden of proving by clear

and convincing evidence that Ms. Iverson and Sanctum Stay

Corporation violated Section 475.25(1)(d)1., Florida Statutes,

because Ms. Iverson failed to return t o Ms. Hendee the $1,000.00

refundable deposit Ms. Hendee paid to Ms. Iverson to secure the

rental of the property located at 2880 Northeast 9th Street,

Pompano, Florida.

24. As to Counts Three and Six, based on the findings of

fact herein, the Department has met its burden of proving by

clear and convincing evidence that Ms. Iverson and Sanctum Stay

Corporation violated Section 475.5051, Florida Statutes, 5 because

Ms. Iverson and Sanctum Stay Corporation did not provide to the

Division documents related to the monies paid by Ms. Hendee or

to the escrow account Ms. Iverson opened for the purpose of

handling the rental transaction. A violation of

Section 475.5051, Florida Statutes, also constitutes a violation

of the Ðcatch allÑ provision of Section 475.25(1 )(e), Florida

Statutes.

25. As to Counts Two and Five, based on the findings of

fact herein, the Division failed to prove by clear and

convincing evidence that Ms. Iverson and Sanctum Stay

Corporation Ðobstruct[ed] or hinder[ed]Ñ Ms. CordoÓs

investigation, and it, therefore, fai led to prove that

Ms. Iverson and Sanctum Stay Corporation violated

Section 475.42(1)(i), Florida Statutes. The evidence

established only that Ms. Iverson failed to provide to the

Division documents related to the deposit received from

Ms. Hendee and the records of the escrow account maintained by

Ms. Iverson. The Division cited no cases in support of its

contention that the failure of a real estate broker to provide

documents to the Division, without more, constitutes a violation

of Section 475.42(1)(i), Florida Statutes. 6 Indeed, the entirety

of the description of the violation encompassed by

Section 475.42(1)(i), Florida Statutes, as well as the fact that

a violation of any provision of Section 475.42(1), Florida

Statutes, is a second - degree misdemeano r, makes it clear that

something more than the failure to provide documents to the

Division is required for a violation of Section 475.42(1)(i),

Florida Statutes.

26. Florida Administrative Code Rule 61J2 - 24.001(3) sets

forth the penalty guidelines establ ished by the Commission Ðfrom

which disciplinary penalties will be imposed upon licensees

guilty of violating Chapter 455 or 475, F.S.Ñ The penalties for

the violations proven by the Division in this case are as

follows: 7

a. Pursuant to Florida Administr ative Code Rule 61J2 -

24.001(3)(e), Florida Statutes, a violation of

Section 475.25(1)(d)1., Florida Statutes, carries a penalty of

an administrative fine ranging from $250 to $1,000 and

suspension to revocation.

b. Pursuant to Florida Administrative Code Rule 61J2 -

24.001(3)(f), Florida Statutes, a violation of

Section 475.25(1)(e), Florida Statutes, carries a penalty of an

administrative fine ranging from $250 to $1,000 and suspension

to revocation.

c. Pursuant to Florida Administrative Code Rule 61J2 -

24. 001(3)(mm), Florida Statutes, a violation of

Section 475.5015, Florida Statutes, carries a penalty of an

administrative fine ranging from $250 to $1,000 and suspension

to revocation.

27. The penalties recommended herein fall within the

ranges set forth in the penalty guidelines:

a. Count One: A penalty of $1,000.00 for violation of

Section 475.25(1)(d)1., Florida Statutes, by Ms. Iverson.

b. Count Three: A penalty of $1,000.00 for violation of

Section 475.5051, Florida Statutes, by Ms. Iverson.

c. Cou nt Four: A penalty of $1,000.00 for violation of

Section 475.25(1)(d)1., Florida Statutes, by Sanctum Stay

Corporation.

d. Count Six: A penalty of $1,000.00 for violation of

Section 475.5051, Florida Statutes, by Sanctum Stay Corporation.

e. Suspension of the licenses of Ms. Iverson and Sanctum

Stay Corporation for a period of five years.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Real Estate Commission

enter a final order imposin g on Linda Johanna Iverson and

Sanctum Stay Corporation an administrative fine in the amount of

$4,000.00 and suspending the brokerage licenses of Linda Johanna

Iverson and Sanctum Stay Corporation for a period of five years.

DONE AND ENTERED this 27th day of September, 2010, in

Tallahassee, Leon County, Florida.

S

___________________________________

PATRICIA M. HART

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 27th day of September, 2010.

ENDNOTES

1 / All references t o the Florida Statutes herein are to the 2009

edition unless otherwise indicated.

2 / PetitionerÓs Exhibit 5, page 2.

3 / Transcript at page 16; PetitionerÓs Exhibit 7, page 2

(reporting statements made by Ms. Iverson during September 4,

2009, meeting). Ms. Cordo attributed the quoted statements to

Ms. Iverson during her testimony and in her Investigative Report

dated October 29, 2009. Ms. Cordo further testified at the

final hearing that Ms. Iverson and her husband made

ÐconflictingÑ statements about t he escrow account, and Ms. Cordo

also testified that Ms. Iverson Ðsaid she didnÓt hold any escrow

and then they said that they did.Ñ Transcript at page 16. By

Ðthey,Ñ Ms. Cordo apparently meant Ms. Iverson and her husband.

It is significant, however, th at Ms. Cordo did not report such

ÐconflictingÑ statements in her Investigative Report. This lack

of corroboration in a report written much closer to the time in

question than the final hearing diminishes the credibility of

Ms. CordoÓs testimony on this po int, and, especially, of her

assent to the rephrasing of her testimony by PetitionerÓs

counsel to describe Ms. Iverson as a person who Ðin your own

words doesnÓt really give you a straight answer.Ñ Transcript at

page 17. Ms. Cordo did not make this state ment about

Ms. Iverson anywhere in her testimony.

4 / PetitionerÓs Exhibit 6.

5 / Florida Administrative Code Rule 61J2 - 14.012 does not

constitute a separate violation because it merely sets out with

particularity the Ðbooks, accounts, and recordsÑ a b roker is

required to maintain by Section 475.5051, Florida Statutes.

6 / See endnote 3, above.

7 / In its Proposed Recommended Order, the Division has

apparently relied on the December 2007 version of Florida

Administrative Code Rule 61J2 - 24.001 in setti ng forth the

disciplinary guidelines applicable in this case; references to

this rule herein are to the version of the rule that was

effective in July 2010 and, therefore, applicable in this

administrative proceeding.

COPIES FURNISHED:

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building - North Tower, Suite N801

Orlando, Florida 32801

Linda Johanna Iverson

Sanctum Stay Corp.

1532 Southeast 12th Street

Fort Lauderdale, Florida 33316

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monr oe 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, N801

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.