11-001088 Department Of Financial Services, Division Of Insurance Agents And Agency Services vs. Weston Professional Title Group, Inc. Status: Closed Recommended Order on Wednesday, February 8, 2012.

Summary: Tile agency was guilty of failing to disburse funds pursuant to HUD-1 settlement statement and failing to maintain surety. Allegations of fraud and incompetence were not proven.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF INSURANCE )

AGENTS AND AGENCY SERVICES, )

)

Petitioner , )

) Case No. 11 - 1088

vs. )

)

WESTON PROFESSIONAL TITLE )

GROUP, INC. , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was

conducted on August 25 , 2011, by video teleconference between

sites in Tallahassee and Miami , Florida, and on October 27 - 28,

2011 in Miami, Florida, before Administrative Law Judge

Claude B. Arrington of the Division of Administrative Hearings

(DOAH).

APPEARANCES

For Petitioners: Melin da Butler , Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Victor K. Rones , Esquire

Law Office of Victor K. Rones, P.A.

16105 Northeast 18th Avenue

North Miami Beach , Florida 33 162

STATEMENT OF THE ISSUES

Whether Weston Professional Title Group, Inc. (Respondent)

committed the violations alleged in Counts I, II, III, V, VI,

and VII of the Amended Administrative Complaint and, if so, the

penalties that should be imposed.

PRELIMINARY STATEMENT

On November 10, 2010, Petitioner filed a n Administrative

Complaint against Respondent that contained allegations

pertaining to two real estate cl osings by Respondent and, based

on those allegations, alleged certain violations of applicable

law in four separate counts . Respondent timely denied the

allegations of the Administrative Complaint, the matter was

referred to DOAH, and assigned to ALJ Errol H. Powell. On

May 10, 2011, Petitioner moved to amend the Administrative

Complaint (motion to amend) and attached an Amended

Administrative Complaint (Amended AC) to its motion. The

Amended AC contained factual allegations as to the two real

estate closing referenced in the initial Administrative

Complaint, and, based on those allegations, alleged certain

violations of applicable law in seven sequentially - numbered

counts, which will be discussed below. On May 16, 2011,

Respondent fi led its response to the motion to amend . On

June 2, 2011, ALJ Powell granted the motion to amend and

accepted the Amended AC . Thereafter, the matter was transferred

to the undersigned for all further proceedings.

Respondent, as the title and settlement a gent, closed on

the sale of a residence located on Collonade Drive, Wellington,

Florida, on November 14, 2006 (Collonade closing). Respondent,

as the title and settlement agent, closed on the sale of a

residence located on Vignon Place , Wellington, Florid a, on

December 15 , 2006 ( Vignon closing).

Counts I, V, and VI of the Amended AC contained alleged

violations of applicable law pertaining to the Collonade

closing. Count IV of the Amended AC was voluntarily dismissed

by Petitioner and will not be discusse d further. Counts II and

VII contained alleged violations of applicable law pertaining to

the Vignon closing. Count III contained alleged violations

regarding Respondent's surety bond.

Counts I, V, and VI will be discussed together in the

Findings of Fac t under the heading "Collonade Drive Closing."

Counts II and VII will be discussed together under the heading

"Vignon Place Closing." Count III will be discussed separately

under the heading "Surety Bond ." 1 /

All statutory referenc es are to Florida Statutes (2011 ).

The cited provisions have not changed since 2006, when the

closings occurred.

References will be made to the federal Real Estate

Settlement Procedures Act of 1974, 12 U.S.C. 2601 et seq.

(RESPA). The federal Department of Housing and Urb an

Development (HUD) has developed a form that is required to be

used in the settlement of the type real estate transactions at

issue in this proceeding. The form is referred to a s a HUD - 1

Settlement Statement (HUD - 1) .

COLLONADE CLOSING - COUNT S I , V, AND VI

Count I alleged that Respondent disbursed $361,000 in

contradiction to the HUD - 1 to entities other than the seller ,

thereby violating the following provisions of law:

(a) Section 626.8473(2), Florida Statutes,

which provides that all funds received by a

title insurance agent as described in

subsection 626.8473(1) shall be trust funds

received in a fiduciary capacity by the title

insurance agent and shall be the property of

the person or persons entitled thereto.

(b) Section 626.8473(4) , which provide s that

funds required to be maintained in escrow

trust accounts pursuant to this section shall

not be subject to any debts of the title

insurance agent and shall be used only in

accordance with the terms of the individual

escrow, settlement, or closing ins tructions

under which the funds were accepted.

(c) Section 626.8437(4), which provides that

it is a violation for a licensee to have

demonstrated a lack of fitness or

trustworthiness to represent a title insurer

in the issuance of its commitments, binder s,

policies of title insurance, or guarantees of

title.

(d) Section 626.8437(5), which provides

that it is a violation to demonstrate lack

of reasonably adequate knowledge and

technical competence to engage in the

transactions authorized by a license or

appointment.

(e) Section 626.8437(6) , which provides

that it is a violation to exhibit fraudulent

or dishonest practices in the conduct of

business under a license or appointment.

(f) Section 626.8437(9) , which provides

that a willful failure to comply with, or

willful violation of, any proper order or

rule of the department or willful violation

of any provision of this act is, in itself,

a violation of law. 2 /

COUNT V

Count V alleged that Respondent prep ared two HUD - 1 s in

conjunction with the Collonade closing that contained different

monetary figures for specified items. Petitioner charged

Respondent with providing a false and inaccurate HUD - 1 in

violation of sub sections 626.8437(4), (5), and (6).

COUNT VI

Count VI alleged that Respondent's records fail to support

the existence of a $195,000.00 dep osit that was reflected on the

HUD - 1 s prepared by Respondent as to the Collonade closing in

violation of sub sections 626.8437(4), (5), and (6).

VIGNON COURT COUNT S II AND VII

Count II alleged that Respondent prepared a HUD - 1 that

m isrepresented a payment to Gaspare Valentino in connection with

the Vignon Court closing in violation of the same provisions of

law set forth in Count I.

COUNT VII

Count VII alleged that Respondent prepared a HUD - 1 in

connection with the Vignon Court closing that contained false

and inaccurate information as to a deposit or earnest money in

violation of subsections 626.8437(4), (5), and (6).

SURETY BOND - COUNT III

Count III alleged t hat Respondent operated from on or about

August 30, 2010 until November 18, 2010, without a required

surety bond, thereby providing grounds for the revocation or

suspension of its license pursuant to section 626.8437(1) and in

violation of sections 626.841 8(2) and 626.8437(9). Section

626.8437(1) requires a title insurance agency to have at all

times a surety bond of not less than $35,000.00 value. Section

626.8437(9) provides that a willful failure to comply with, or

willful violation of any proper order or rule of the department

or willful violation of any provision of the act is, in itself,

a violation of law.

On August 18, 2011, the parties filed a Joint Pre - Trial

Stipulation that contained certain stipulated facts and agreed

issues of law. Those stipulations have been incorporated into

this Recommended Order to the extent deemed appropriate.

On August 18, 2011, Petitioner filed a motion to take

official record of a final order entered by Petitioner in

another proceeding. That motion was granted d uring the course

of the formal hearing.

At the formal hearing, Petitioner presented the testimony

of Ray Wenger (a financial administrator employed by Petitioner)

and offered 33 sequentially - numbered exhibits, each of which was

admitted into evidence. Res pondent presented the testimony of

Alan Shuminer (a practicing real estate attorney), Mr. Wenger,

Keila Marrero (a n employee of Respondent) and Jose Marrero (a

practicing attorney , who is the president of Respondent ) .

( Ms. Marrero and Mr. Marrero are sibl ings ) . Respondent offered

80 sequentially - numbered exhibits each of which was admitted

into evidence except for Respondent's E xhibit 14.

The Transcript of the proceedings conducted on August 25,

2011, consisting of two volume s , was filed on September 22 ,

2011 . The Transcript of the proceedings conducted on October 27

and 28, consisting of three volumes, was filed on November 21,

2011.

The parties timely filed their respective Proposed

Recommended Orders , which have been duly considered by the

undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times, Petitioner has been the entity of the

State of Florida charged with the responsibility to regulate

title insurance agencies.

2. At all times relevant to this proceeding Respondent was

licensed by Petitioner as a title insurance agent in the State

of Florida. As of the formal hearing, Respondent had ceased its

operations due to the lack of business.

3. Petitioner's investigation of Respondent was initiated

by a complaint from a man named Robert Anderson. Mr. Anderson

represented to Petitioner that he discovered that his name and

address had been used as the buyer of the two residences

discussed above.

4. Respondent was the title and settlement agent for both

transaction s. The Collonade Drive transaction settled on

November 14, 2006 , with disbursement of the funds on

November 16, 2006. The Vignon Place transaction settled and the

funds were disbursed on December 15, 2006 .

5. Mr. Anderson reported to Petitioner his belief that his

identity had been stolen by a person named Pamela Higgins.

Mr. Anderson reported to Petitioner that he had not participated

in either transaction , and asserted that he did not sign any of

the documents that purport to contain his signature as the

buyer.

6. Respondent was required to comply with the provisions

of RESPA in completing the HUD - 1 for the Collonade Drive closing

and the Vignon Place closing. RESPA required that disbursements

at closing be consistent with the HUD - 1 as approved b y the

parties to the transaction and by the lender.

COLLONADE DRIVE CLOSING

7. On September 15, 2006, Robert Anderson (or someone

impersonating Mr. Anderson) signed a "Contract for Sale and

Purchase" (Collonade contract), agreeing to buy the Collonade

Dri ve property from Mark Mariani and Kathy Mariani, for the

purchase price of $1,375,000.00.

8. The Collonade contract reflected that a deposit had

been made to "FLORIDA TITLE & ESC." in the amount of $5,000 with

an additional deposit of $5,000 to be made wi thin ten days.

9. Two loans with separate mortgages constituted the

financing for the purchase of the Collonade Drive property. The

first mortgage was $962,500.00. The second mortgage, as

reflected on the HUD - 1 Settlement Statement with the

disbursement date of November 14, 2006, was $263,430.08. 3 / First

Magnus Financial Corporation, an Arizona corporation, was the

lender for both loans.

10. Agents of America Mortgage Corp. served as the

mortgage broker for the transaction.

11. Juan Carlos Rodriguez, an employee of Agents of

America Mortgages, signed Mr. Anderson's loan application as the

"interviewer."

12. The following was a special clause of the Collonade

contract: "BUYER AGREES TO PAY FOR TITLE INSUANCE [sic] FEE

ONLY (LINE 1108 OF SELLERS' SETTL EMENT STATEMENT), ONLY [SIC] IF

SELLERS AGREE TO USE BUYER'S TITLE COMPANY OF CHOICE. BUYER IS

A LICENSED FLORIDA REAL ESTATE AGENT."

13. Petitioner established that Robert Anderson was not a

licensed Florida real estate agent.

14. The Collonade contrac t represented that there were no

real estate brokers representing either party .

15. On or about November 1 , 2006, Respondent received a

"Request for Title Commitment" from Claudit Casanova, a mortgage

broker with Agents of America Mortgage Corp. , for the Collonade

Drive transaction. This was a revised request. The first

request had been sent to Respondent on or about October 3, 2006.

A copy of the Collonade contract had been forwarded to

Respondent with the first request.

16. In connection with the Col lonade Drive transaction,

Respondent prepared two HUD - 1 s , 4 / each of which w as approved by

the parties and the lender. 5 / The first HUD - 1 had an anticipated

closing date of November 14, 2006. That HUD - 1 was revised in

response to the lender ' s instruction to move the disbursement

date from November 14, 2006, to November 16, 2006. The revision

of the HUD - 1 slightly reduced the amount of cash the buyer

needed to close as a result of interest beginning to run on the

loans as of November 16 inste ad of November 14.

17. This was a mail - away closing, in that a packet of the

documents the buyer was to sign was sent to someone named Laurie

Martin at a title agency in Glendale, Arizona. Ms. Marrero

testified she mailed the packet pursuant to instructions without

specifying who gave her those instructions. The packet of

documents was returned to Respondent, with signatures purporting

to be Mr. Anderson's. Laurie Martin appears to have served as

the notary public when the documents were signed .

18. The transaction closed pursuant to the revised HUD - 1

with the disbursement date of November 16, 2006 , which, as

approved by the parties and the lender, reflected that the

sellers were to receive $477,884.93 upon closing.

19. Upon closing, Responden t drafted a check in the amount

of $477,884.93 made payable to the sellers . The sellers voided

the check and based on instructions from the sellers ,

Ms. Marrero redistribute d the sellers' proceeds by wire transfer

as follows: $116,112.85 to sellers; $170,250.00 to Pamela

Higgins; and $191,508 .08 to Unlimited Advertising USA. Fourteen

dollars w ere spent on wire transfer charges.

20. The actual disbursement of the seller's proceeds was

inconsistent with the HUD - 1 and unknown to the buyer and the

lender . Respondent violated the provisions of RESPA by

disbursing the proceeds of the sale in a manner that was

inconsistent with the HUD - 1.

$195,000 DEPOSIT

21. The Collonade contract reflected that a $5,000 deposit

had been made to "Fla. Title & Esc." required for the buyer to

pay a n additional deposit of $5,000 within ten days. There was

no evidence establishing any relationship between Respondent and

"Fla. Title & Esc." Both HUD - 1s for the Collonade Drive

transaction reflected that the buyer had provided to the sellers

a deposit in the amount of $195,000.

22. These HUD - 1s, reflecting that the sellers were holding

a deposit in the amount of $195,000, were approved by the

parties and the lender.

23. Ms. Marrero testified that she was instructed to

include the $195,000 deposit on the HUD - 1s without specifying

who gave her those instructions.

24. Ms. Marrero did not attempt to verify that the

$195,000 deposit was actually being held b y the sellers.

FRAUD

25. Petitioner a lleged that the Collonade Drive

transaction was fraudulent. Mr. Wenger's testimony, based in

part on reports of mortgage fraud prepared by the Federal Bureau

of Investigation, supported that allegation. Other evidenc e

supporting that allegation included the following fact s

A. T he first mortgage quickly went into

foreclosure ;

B. A mailing address given for Robert

Anderson did not (as of April 19, 2011)

exist.

C. The a ddress of Unlimited Advertising USA

was also th e address of Claudia Rodriguez, a

former Florida title agent whose license had

been suspended by Petitioner for failing to

disburse in accordance with HUD statements

and disbursing on uncollected funds;

D. The address of Unlimited Advertising USA

was also the address of Juan Carlos

Rodriguez (the person who supposedly took

the credit application from Robert

Anderson) ;

E. The address of Unlimited Advertising USA

was also the address of Agents of America

Mortgage Corporation (the mortgage broker

f or the Collonade closing.

F . Juan Carlos Rodriguez supposedly

notarized the document authorizing

disbursement of part of the sellers'

proceeds to Pamela Higgins.

G . Mr. Anderson's purported signatures on

different documents are inconsistent.

26. The address for Mr. Anderson as it appears on the HUD -

1 Settlement Statements is 14233 W. Jenan Drive, Surprise,

Arizona.

27. Prior to the closing Ms. Marrero sent by Federal

Express a copy of the unexecuted closing documents to "Pam

Higgins c/o Robert S. And erson" 12211 N. 85th Street,

Scottsdale, Arizona.

28. Following the closing, Ms. Marrero sent a copy of the

closing documents by Federal Express to Robert S. Anderson, at

the address 12211 N. 85th Street, Scottsdale, Arizona.

29. Ms. Marrero testified that she acted on instructions

in sending the two packages, without identifying who gave her

those instructions.

30. There was no evidence that anyone employed by

Respondent knew anyone connected to this transaction prior to

being asked to provide a title commitment. There was

insufficient evidence to establish that Respondent had anything

to do with the buy - sell agreement between the buyer and the

sellers or the efforts by Mr. Anderson (or the person or persons

impersonating Mr. Anderson) to obtain finan cing for the

purchase.

31. While there was significant evidence that the

Colonnade Closing was a fraudulent transaction, there was

insufficient evidence to establish that Respondent was complicit

in that fraud.

VIGNON COURT CLOSING

32. On a date p rior to November 6, 2006 , Maribel and

Timothy Graves signed a "Contract for Sale and Purchase"

offering to sell their Vignon Court residence to Robert Anderson

for the purchase price of $1,975,000.00. Mr. and Mrs. Graves

were represented by counsel during this transaction. T he copy

of the contract admitted into evidence had not been signed by

Mr. Anderson and did not bear a legible date . The contract

provided an acceptance date of November 6, 2006. The fully

executed contract was not admitted into evidence.

33. On October 4, 2006, Claudit Casanova of Agents of

America Mortgage requested Respondent to provide a title

commitment for t he Vignon Court transaction. In that request,

the sales price was stated as being $1,975,000; the loan amount

was $1,481,250 an d the mortgagee was American Brokers Conduit.

34. Preferred Properties, Int., Inc. , was listed as being

the real estate broker for the transaction.

35. Respondent prepared a HUD - 1 for the Vignon Court

transaction that reflected a closing and disbursement date of

December 15, 2006.

DEPOSIT

36. The unexecuted (by the buyer) and undated copy

Purchase Agreement required a deposit of $100,000 at the time of

acceptance with an additional $50,000 being due within ten days

thereafter. There was no evidence as to the terms of the

completely executed Purchase Agreement.

37. Line 201 of the HUD - 1 reflected a deposit of $250,000

paid on behalf of the buyer. Respondent did not verify that

deposit had been made. The HUD - 1 specified that the deposit was

being held by the sellers.

38. The buyer, sellers, and lender approved the HUD - 1 ,

which reflect ed the existence of a deposit of $250,000 , prior to

closing.

GASPARE VALENTINO

39. On December 6, 2006, Mr. and Mrs. Graves entered into

a "Joint Venture and Property Res ale Agreement" (Resale

Agreement) pertaining to the sale of the Vignon Court residence

with Gaspare Valentino . On February 5, 2002, Gaspare Rino

Valentino was issued a license by the Department of Business and

Professional Regulation of the type "Real Est ate Broker or

Sales" and of the rank "Sales Associate." That license was

valid at the times relevant to this proceeding.

40. Paragraph 2 of the Resale Agreement provid es as

follows :

(2) S ALE EFFORTS : CONTRACT PROCEEDS .

Valentino agrees to use reasonable efforts to

obtain a third party purchaser (a

"Purchaser") for the Property. Valentino is

not required to advertise the Property or

list the Property for sale, but shall have

such right to do so. Valentino does not

guaranty [sic] the procurement of a

Purchaser. The parties agree that the

intention is for Valentino to secure a

Purchaser who will pay a purchase price

sufficient in order to (i) satisfy the

existing debt upon the Property, (ii) pay

ordinary and reasonable closing cos ts of the

transaction, (iii) generate a net proceeds

[illegible] to Owner not less than ONE

HUNDERED THOUSAND AND NO/100 DOLLARS

($100,000); and (iv) generate such further

sums beyond the foregoing in order to pay

Valentino a fee for services rendered as s et

forth in this Agreement. In accordance with

such understanding, Owner agrees t o enter

into and fully execute a Contract for

Purchase and Sale with a Purchaser procured

by Valentino which is consistent with the

terms set forth in this Agreement, includi ng

without limitation, a designated sales price

which enables Owner to receive at closing a

net proceeds sum equal to ONE HUNDERED

THOUSAND AND NO/100 DOLLARS ($100,000) (the

"Owner's Sale Proceeds") after payment of the

Property Sale Expenses, hereinafter defined

as set forth in Paragraph 3. Owner agrees

that any net sales proceeds in excess of the

Owner's Sale Proceeds shall be payable to

Valentino (the "Excess Proceeds Fee), as

Valentino's fee for the efforts of Valentino

as set forth herein.

41. Para graph 3 (i) of the Resale Agreement reiterates

that after the payment of the "Property Sale Expenses" as

follows:

(i) Owner shall receive the Owner Sale

Proceeds consisting of exactly ONE HUNDERED

THOUSAND AND NO/100 DOLLARS ($100,000) from

the net sales proceeds . . .

42. Paragraph 3 (ii) of the Resale Agreement reiterates

that after the payment of the "Property Sale Expenses" and the

"Owner Sale Proceeds":

(ii) Valentino shall rec eive the Excess

Proceeds Fees, constituting all remaining net

sales proceeds in excess of the Owner Sale

Proceeds, as a fee for services rendered by

Valentino pursuant to this Agreement.

43. Paragraph 7 of the Resale Agreement is as follows:

7. Licensed Agent : Valentino represents and

discloses that Valentino is a licensed real

estate agent in the State of Florida.

Notwithstanding such, Valentino is

individually entering into this Agreement

using his own resources to assist Owner in

the improvement and sale of the Property, and

as such is a principal in this transaction

earning the Excess Proceeds Fee . The parties

acknowledge that Valentino is an investor in

this transaction and as such at closing is

entitled to and shall receive the Excess

Proceeds Fe e as set forth in Section

[Paragraph] 3(ii) of this Agreement.

44. Under RESPA, Section 700 of a HUD - 1 is appropriately

used for reporting the payments for commissions to real estate

salesmen and/or brokers as part of the "Settlement Charges."

45. Such payments can also be reported under Section 1300

("Additional Settlement Charges"), if the payments are

appropriately labeled.

46. Respondent reflected the payment of $527,656.92 as

"Payoff" to Gaspare Valentino at line 1307 of Section 1300 . "

47. Pr ior to closing the buyer, sellers, and lender had

approved the HUD - 1 for the Vignon Court transaction. The lender

was aware of the Resale Agreement.

48. Mr. Marrero is an attorney licensed to practice law in

Florida. Mr. Marrero construed the payments t o Mr. Valentino to

be other than a real estate commission. Although it is clear

that Petitioner considers that payment to Mr. Valentino to be a

real estate commission, the terms of the Resale Agreement

entitled Mr. Marrero to treat that payment as being t o an

investor. Petitioner failed to establish that Respondent

erroneously stated the payment to Mr. Valentino on the HUD - 1.

SURETY BOND

49. As a condition of licensure, a title agency is

required to provide to Petitioner a $35,000 security deposit or

a $ 35,000 surety bond. In connection with its application for

licensure on August 29, 2002, Respondent filed the required

surety bond with Petitioner. The bond was issued by Fidelity

and Deposit Company of Maryland with bond number 133046577.

50. On July 1 4, 2004, Petitioner received from Respondent

a surety bond issued by Western Surety Company in the amount of

$35,000, effective as of August 29, 2004 . The bond number was

69728435.

51. On May 28, 2010, Petitioner received a letter from his

surety dated M ay 24, 2010, which advised that bond number

69728435 would be voided or cancelled as of August 29, 2010.

52. That letter of cancellation showed a copy being

furnished to Respondent at the address "1 8 20 N orth . Corporate

Lakes B oulevard , S ui te 105, Weston, Fl orida 33326."

53. On June 11, 2010, Petitioner advised Respondent by

letter sent to "18 20 North Corporate Lakes Boulevard , S uite.

105, Weston, Florida 33326" that it had received the

cancellation letter. The letter stated, in part, as follows:

If we do not receive a replacement bond

within 30 days of the dated letter, we will

forward your file to the appropriate

division for disciplinary action. If you do

not plan to continue transacting business

and wish to terminate your license, you must

submit a re quest to us immediately.

54. Prior to May 24, 2010, Respondent moved its offices

from 1802 North Corporate Lakes Boulevard, Suite 105, Weston,

Florida , to Suite 304 of the same building. Mr. Marrero

testified that he had no recollection of receiving the letters

cancelling the surety bond or the letter from Petitioner dated

June 11, 2010.

55. Respondent was without a surety bond between August

29, 2010, and November 18, 2010. Petitioner did not establish

that Respondent's failure to maintain it surety b ond during that

period was willful within the meaning of section 626.8437(9).

56. No prior disciplinary action has been brought against

Respondent.

CONCLUSIONS OF LAW

57 . DOAH has jurisdiction over the subject matter of and

the parties to this proceeding pursuant to sections 120.569 and

120.57(1).

58 . This proceeding seeks to impose discipline against

Respondents and is, consequently, penal in nature. State ex

rel. Vining v. Fla. Real Estate Comm'n , 281 So. 2d 487, 491

(Fla. 1973). Accordingly, to impose discipline, the Department

must prove the charges against Respondents by clear and

convincing evidence. Dep't of Banking & Fin., Div. of Sec. &

Investor Prot. v. Osborne Stern & Co. , 670 So. 2d 93 2, 933 - 34

(Fla. 1996)(citing Ferris v. Turlington , 510 So. 2d 292, 294 - 95

(Fla. 1987)); Nair v. Dep't of Bus. & Prof'l Reg., Bd. of Med. ,

654 So. 2d 205, 207 (Fla. 1st DCA 1995).

59 . Regarding the standard of proof, in Slomowitz v.

Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983), the court

developed a "workable definition of clear and convincing

evidence" and found that of necessity such a definition would

need to contain "both qualitative and quantitative standards."

The court held that:

clear and convinc ing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify

must be distinctly remembered; the testimony

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 a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Id . The Florida Supreme Court later adopted the Slomowit z

court's description of clear and convincing evidence. See In re

Davey , 645 So. 2d 398, 404 (Fla. 1994).

60 . The provisions of the Insurance Code cited in this

Recommended Order have not changed at any time relevant to this

proceeding.

61 . Petitioner p roved by clear and convincing evidence

that Respondent distributed portions of the sellers' proceeds to

entities other than the sellers in contradiction of the HUD - 1

for the Collonade closing and contrary to the instructions given

to it by the lender . Tha t distribution constituted a violation

of sub section s 626.8473(2) and ( 4 ) as alleged in Count I of the

AC. Petitioner did not prove by clear and convincing evidence

that by making the distribution Respondent violated the

provisions of section 626.8437(4) (lack of fitness), section

626.8437(5) (lack of knowledge), section 626.8437(6) (fraud or

dishonesty), or section 626.8437(9) (willful failure to comply

with a provision of the act ) .

62. Petitioner did not prove by clear and convincing

evidence that Respondent provided a false and/or inaccurate HUD -

1 in connection with the Collonade closing as alleged in Count V

of the Amended AC. Consequently, Respondent is not guilty of

the violations a lleged in Count V of the Amended AC.

63. Petitioner proved by clear and convincing evidence

that Respondent did not independently verify the existence of a

$195,000 deposit supposedly held by the sellers as part of the

Collonade closing. However, Petitio ner did not prove by clear

and convincing evidence that Respondent had a duty to make such

an independent verification of the deposit. Consequently, it is

concluded that Petitioner failed to prove that Respondent

committed the violations alleged in Count VI of the Amended AC.

64. Petitioner failed to prove by clear and convincing

evidence that Respondent committed the violations alleged in

Count II of the Amended AC relating to the Vignon closing by

misrepresenting the payment made to Gaspare Valentino.

Mr. Valentino's entitlement to the portion he received was a

result of the Resale Agreement he executed with the sellers.

Respondent was not required to represent the distribution to

Mr. Valentino as a real estate commission.

65. Petitioner did not prove by clear and convincing

evidence that the HUD - 1 prepared for the Vignon closing

contained false and inaccurate information as to the $250,000

deposit. There was no evidence that the deposit did not exist

or that the amount was inaccurate. P etitioner failed to prove

that Respondent had a duty to verify the existence of or the

amount of the deposit since Respondent was not holding the

deposit in escrow. Consequently, Respondent is not guilty of

the violations alleged n Count VII of the Amende d AC.

66. Petitioner proved by clear and convincing evidence

that Respondent did not have a surety bond between August 30 and

November 18, 2010, as required by section 626.8 4 18(2) and in

violation of section 626.8 437(1), as alleged in Count III of the

Ame nded AC. Petitioner did not prove by clear and convincing

evidence that Respondent's failure to maintain its surety bond

was willful. Consequently, Petitioner failed to prove that the

failure to maintain the surety bond violated section

626.8437(9). In reaching this conclusion, the undersigned has

considered Mr. Marrero's testimony that Respondent's offices

relocated and that he could not recall receiving notice of

cancellation from the surety or the warning letter from

Petitioner.

67. In recommending t he penalties to be imposed, the

undersigned has considered the disciplinary guidelines found at

Florida Administrative Code Rule 69B - 231.120. There are no

mitigating or aggravating factors to be considered pursuant to

Florida Administrative Code Rule 69B - 231.160.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Financial Services

enter a final order finding Respondent guilty of violating the

provisions of subsections 626.8473(2) and (4) as alleged in

Count I of the Amended AC; and guilty of failing to maintain a

surety bond as required by section 626.8418(2) in violation of

section 626.8437(1), as all eged in Count III of the Amended AC.

It is further recommended that the final order find Respondent

not guilty of all other violations alleged in the Amended AC.

For the violations found as to Count I, it is recommended that

Respondent's licensure be sus pended for a period of six months.

For the violations found in Count III, it is recommended that

Respondent's licensure be suspended for a period of three

months. It is further recommended that the periods of

suspension run concurrently.

DONE AND ENTER ED this 8th day of February, 2012 , in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of February, 2012

ENDNOTES

1 / The following is intended to be a summary of Petitioner's

pleadings only.

2 / The reference to the "act" is to the Florida Insurance Code

as defined by section 624.01.

3 / As will be discussed below, Respondent prepared two HUD - 1

Settlement Statements. The first reflected that the settlement

and disbursement w ould both be on November 14, 2006. The second

reflected a settlement date on November 14, 2006, and a

disbursement date of November 16, 2006.

4 / Petitioner's contention that there were four separate HUD - 1s

prepared by Respondent is not supported by the evidence.

5 / In its PRO, Petitioner proposes findings of fact that are

consistent with a finding that Mr. Anderson did not sign the

HUD - 1 with the disbursement date of November 14, nor did he sign

the HUD - 1 with the disbursement date of November 16. Tho se

proposed facts are rejected as being contrary to the allegations

of the Amended AC and to the stipulated facts set forth in the

Joint Pre - Hearing Stipulation.

COPIES FURNISHED:

Julie Jones, CP,FRP, Agency Clerk

Department of Financial Services

Divisio n of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

Melinda Hilton Butler, Esquire

Department of Financial Services

Division of Legal Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Victor K. Rones, Esquire

Margulies and Rones, P.A.

16105 Northeast 18th Avenue

North Miami Beach, Florida 33162

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommende d Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.