10-001609PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Michael Jacob Piwko Status: Closed Recommended Order on Friday, June 18, 2010.

Summary: Respondent took buyer's money, failed to deposit it to broker's account, and did not refund the deposit. Therefore, the violations alleged were proved by clear/convincing evidence.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 10-1609PL

)

MICHAEL JACOB PIWKO, )

)

Respondent. )

)

RECOMMENDED ORDER

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

by video teleconference on May 6, 2010, with the parties to

appear from Orlando, Florida, before J. D. Parrish, a designated

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Joseph A. Solla, III, Esquire

Department of Business and

Professional Regulation,

Division of Real Estate

400 West Robinson Street, N801

Orlando, Florida 32801-1757

For Respondent: No Appearance

STATEMENT OF THE ISSUES

Whether Michael Jacob Piwko (Respondent), committed the

violations alleged in the Administrative Complaint dated

December 15, 2009, and, if so, what penalties should be imposed.

PRELIMINARY STATEMENT

The Department of Business and Professional Regulation,

Division of Real Estate (Petitioner) filed a four-count

Administrative Complaint against Respondent that alleged

violations of Subsection 475.25(1), Florida Statutes (2008).

The alleged violations stemmed from Respondent’s dealings with

one individual who allegedly deposited funds with Respondent in

the course of real estate transactions that ultimately were not

completed. All references to law are to Florida Statutes (2008)

unless otherwise stated.

On or about January 15, 2010, Respondent, through counsel,

forwarded a Notice of Appearance, Answer, Request for

Investigative File, Request for Formal Hearing, Motion to

Dismiss for Lack of Subject Matter Jurisdiction and Request for

Attorneys Fees. Thereafter, the matter was forwarded to the

Division of Administrative Hearings (DOAH) for formal

proceedings. Timely with the referral, an Initial Order was

issued on March 25, 2010.

On March 31, 2010, a Notice of Withdrawal was filed by

Respondent's counsel followed by Petitioner's Unilateral

Response to Initial Order on April 1, 2010. An Order on the

Notice of Withdrawal was entered on April 6, 2010, that

provided, in pertinent part:

A Notice of Withdrawal has been filed by

Heather Rutecki, Esquire, counsel for

Respondent, in this case. The Notice fails

to comply with Florida Administrative Code

Rule 28-106.105(3):

On written motion served on the party

represented and all other parties of

record, the presiding officer shall

grant counsel of record . . . leave to

withdraw for good cause shown.

The Notice fails to include a certificate of

service indicating that Respondent or

counsel for Petitioner have been served with

the Notice and is not in the form of a

motion. No action to remove Ms. Rutecki as

counsel of record will be taken until

Florida Administrative Code Rule

28-106.105(3) is complied with.

On April 14, 2010, a Notice of Hearing by Video

Teleconference and an Order of Pre-hearing Instructions were

entered. The case was set for hearing for May 6, 2010.

A second Notice of Withdrawal was filed by Respondent’s

counsel on May 3, 2010. It is more fully addressed in the

conclusions of law below as is the Motion for Emergency Relief

Where Final Hearing Held in [sic] Absent of Both Respondent and

Counsel for Respondent.

At the hearing, Petitioner presented the testimony of

Joaquin Inigo and Arthur Soule. The documents attached to the

Administrative Complaint were admitted into evidence as Exhibits

1-3. The Transcript of the proceedings was filed with DOAH on

June 10, 2010. Petitioner timely filed a Proposed Recommended

Order.

FINDINGS OF FACT

1. Petitioner is an agency of the State of Florida created

by Section 20.165, Florida Statutes. Petitioner is charged with

the responsibility of regulating the real estate industry in

Florida pursuant to Chapters 455 and 475, Florida Statutes. As

such, Petitioner is fully authorized to prosecute disciplinary

cases against real estate licensees.

2. Respondent was at the times material to this matter,

the holder of a Florida real estate associate license, license

number 707518, issued by Petitioner. As last known, Respondent

was an active sales associate with All Star Investment Realty,

Inc., 9425 Sunset Drive #180, Miami, Florida 33173.

3. From January 2008 through May 2008, Respondent was

employed as a sales associate with Enrique Piwko, the qualifying

broker for All Star Investment Realty, Inc.

4. In January of 2008, Joaquin Inigo, a buyer, sought to

purchase a condominium in Tampa, Florida. He gave Respondent a

deposit for the purchase, but was later advised the deal had

“fallen through.”

5. On or about May 17, 2008, Mr. Inigo executed a contract

for purchase and sale seeking to acquire a second condominium,

unit number 208, at 310 Crestwood Circle, Royal Palm Beach,

Florida 33411. As part of the transactions with Respondent,

Mr. Inigo tendered approximately $77,000.00 to Respondent to be

applied to the purchase price of unit 208.

6. Monies were tendered to Respondent directly because

Mr. Inigo expected Respondent to get an employee discount

related to the sale and pass that on to him.

7. The closing date in July passed without unit 208 being

conveyed to Mr. Inigo. Efforts to achieve a refund of the

deposit monies were fruitless.

8. Upon investigation of the matter, Petitioner discovered

that Respondent never deposited Mr. Inigo’s funds in escrow with

his broker. Petitioner did not negotiate the purchase of

unit 208. Petitioner did not refund the deposit monies.

9. All monies provided by Mr. Inigo to Respondent were for

the purchase of unit 208 and were not a personal loan to

Respondent.

10. Respondent asserted in pleadings that the monies from

Mr. Inigo were a personal loan. Respondent did not, however,

present written evidence of the alleged loan or its terms and

declined to respond to the investigatory efforts made by

Petitioner.

11. Petitioner did not present evidence regarding the cost

of investigating this matter.

CONCLUSIONS OF LAW

12. DOAH 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 (2009).

13. Petitioner seeks to impose administrative penalties

against Respondent that include the suspension or revocation of

his real estate license. Therefore, Petitioner has the burden

of proving the specific allegations of fact that support its

charges by clear and convincing evidence. 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); and Pou v.

Department of Insurance and Treasurer , 707 So. 2d 941 (Fla. 3d

DCA 1998).

14. What constitutes “clear and convincing” evidence was

described by the court in Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112, 116, n. 5

(Fla. 1st DCA 1989), 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 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).

See also In re Graziano , 696 So. 2d 744 (Fla. 1997); In re

Davey , 645 So. 2d 398 (Fla. 1994); and Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

652 (Fla. 5th DCA 1998)(Sharp, J., dissenting).

15. Section 475.25, Florida Statutes, authorizes

Petitioner to discipline any Florida real estate licensee who

commits any of a number of offenses defined by the statute.

Pertinent to this case, however, are the following provisions

that Petitioner alleged Respondent violated:

(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.

2. Has failed to deposit money in an escrow

account when the licensee is the purchaser

of real estate under a contract where the

contract requires the purchaser to place

deposit money in an escrow account to be

applied to the purchase price if the sale is

consummated.

(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.

* * *

(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 broker 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 savings and loan

association located and doing business in

this state, wherein the funds shall be kept

until disbursement thereof is properly

authorized; or has failed, if a sales

associate, to immediately place with her or

his registered employer any money, fund,

deposit, check, or draft entrusted to her or

him by any person dealing with her or him as

agent of the registered employer. The

commission shall establish rules to provide

for records to be maintained by the broker

and the manner in which such deposits shall

be made. A broker may place and maintain up

to $5,000 of personal or brokerage funds in

the broker’s property management escrow

account and up to $1,000 of personal or

brokerage funds in the broker’s sales escrow

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. It is the

intent of the Legislature that, in the event

of legal proceedings concerning a broker’s

escrow account, the disbursement of escrowed

funds not be delayed due to any dispute over

the personal or brokerage funds that may be

present in the escrow account.

16. Additionally, Petitioner maintains that Respondent

violated Florida Administrative Code Rule 61J2-14.009. That

regulation provides:

Every sales associate who receives any

deposit, as defined in Rule 61J2-14.008,

Florida Administrative Code, shall deliver

the same to the broker or employer no later

than the end of the next business day

following receipt of the item to be

deposited. Saturday, Sundays and legal

holidays shall not be construed as business

days. Receipt by a sales associate or any

other representative of the brokerage firm

constitutes receipt by the broker for

purposes of paragraph 61J2-14.008(1)(d),

Florida Administrative Code.

17. Based upon the undisputed testimony in this cause,

Respondent was given deposit monies that were not applied for

the benefit of the buyer. Respondent did not promptly deposit

the monies into his broker’s account, did not refund those

monies when requested, and did not negotiate the sales

transaction to assure that the funds would be appropriately

applied to the purchase price.

18. Based upon the foregoing, Petitioner has established

by clear and convincing evidence that Respondent violated the

provisions of law cited by the Administrative Complaint.

19. Next, it is necessary to decide Respondent’s Motion

for Emergency Relief where Final Hearing Held in [sic] Absent of

Both Respondent and Counsel for Respondent. Essentially, the

motion seeks to re-notice the hearing for trial and afford the

Respondent with additional notice of the proceedings. The basis

for the request stemmed from counsel’s continuing effort to

withdraw in this matter and Respondent’s alleged refusal to

contact counsel or to participate in the defense of the cause.

As indicated above, counsel for Respondent was advised by order

dated April 6, 2010, of the requirements in order to consider a

motion for withdrawal. The pleading filed on May 3, 2010, some

three days before the scheduled hearing, represented that a copy

of the document had been provided to Respondent on or about

April 21, 2010. The docket of this case has been available

on-line at all times. Respondent and counsel for Respondent

could easily review the docket to determine if a ruling had been

entered on the “Notice of Withdrawal” filed May 3, 2010. A

continuance of the May 6, 2010, hearing date was not requested.

20. Finally, Respondent did not bear the burden of proof

in this cause. Petitioner was obligated to go forward and to

present its evidence to support the allegations of the

Administrative Complaint. Had Respondent sought to provide

information regarding his side of the matter, he could have done

so during the investigatory period of the case or in advance of

the hearing. Respondent was not required to prove anything.

Subsequent to the hearing date Respondent, individually, did not

seek relief of any kind. Based upon the foregoing, Respondent's

request for emergency relief is denied. Having treated the

second “Notice of Withdrawal” as a motion for same, it is hereby

granted.

21. The only issue remaining for consideration is the

appropriate disciplinary action which should be taken by the

Florida Real Estate Commission (hereinafter referred to as the

“Commission”), against Respondent for the violations noted in

the Administrative Complaint and proven as indicated above.

After consulting the “disciplinary guidelines” of the Commission

set forth in Florida Administrative Code Chapter 61J2-24, it is

noted that the guidelines place restrictions and limitations on

the exercise of the Commission’s disciplinary authority. See

also Parrot Heads, Inc. v. Department of Business and

Professional Regulation , 741 So. 2d 1231, 1233 (Fla. 5th DCA

1999)(“An administrative agency is bound by its own rules . . .

creat[ing] guidelines for disciplinary penalties.”); and

§ 455.2273(5), Fla. Stat.

22. In accordance with the guidelines, it is therefore

recommended that Respondent be fined not less than $2,000.00 and

have his license suspended for not less than five years.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

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

Florida Real Estate Commission finding Respondent in violation

of the provisions of law set forth in the Administrative

Complaint as alleged by Petitioner, imposing an administrative

fine in the amount of $2,000.00, and imposing a suspension of

Respondent’s real estate license for a period of five years.

DONE AND ENTERED this 18th day of June, 2010, in

Tallahassee, Leon County, Florida.

S

J. D. PARRISH

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 18th day of June, 2010.

COPIES FURNISHED :

Joseph A. Solla, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Florida 32801-1757

Heather A. Rutecki, Esquire

Rutecki & Associates, P.A.

Bank of America Tower

100 Southeast Second Street, Suite 4600

Miami, Florida 33131

Roger P. Enzor, Chair

Real Estate Commission

Department of Business and

Professional Regulation

400 West Robinson Street, N801

Orlando, Florida 32801

Thomas W. O’Bryant, Jr., Director

Division of Real Estate

400 West Robinson Street, N801

Orlando, Florida 32801

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

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 these cases.