13-000143PL Department Of Business And Professional Regulation vs. Mounir Albert El Beyrouty Status: Closed Recommended Order on Monday, August 5, 2013.

Summary: Real estate broker was dishonest in managing rental property, failed to deliver rental proceeds, failed to escrow, and failed to reconcile escrow account.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION ,

DIVISION OF REAL ESTATE, 1/

Petitioner ,

vs. Case No. 13 - 0 143PL

MOUNIR ALBERT EL BEYROUTY ,

Respondent .

/

RECOMMENDED ORDER

On May 8 and 9, 2013, a final administrative hearing was

held in this case in Clearwater before J. Lawrence Johnston,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Magdalena Ozarows ki, Esquire

Joshua Kendrick, Esquire

Department of Business

and Professional Regulation

1940 North Monroe Street , Suite 42

Tallahassee, Florida 32399 - 2202

For Respondent: Bruce J. Robbins, Esquire

Law Office of Bruce J. Robbins

509 South Martin Luther King, Jr. Avenue

Clearwater, Florida 33756 - 5607

STATEMENT OF THE ISSUE

The issue in this case is whether the Florida Real Estate

Commission should discipline the Respondent, Mounir Albert El

Beyrouty, on ch arges that he failed to deliver rental proceeds,

was dishonest in his dealings regarding the rental property,

failed to escrow rental deposits and proceeds, and failed to

properly reconcile his escrow account.

PRELIMINARY STATEMENT

The Petitioner, Departme nt of Business and Professional

Regulation, Division of Real Estate (Division) , filed an

Administrative Complaint against the Respondent alleging: in

Count I, that he failed to deliver rental proceeds, in violation

of section 472.25(1)(d), Florida Statute s (201 3 ) 2/ ; in Count II,

that he was dishonest in his dealings regarding the property, in

violation of section 472.25(1)(b); in Count III, that he failed

to deposit rental deposits and proceeds in escrow, in violation

of section 472.25(1)(k); and, in Count IV, that he failed to

properly reconcile his escrow account, in violation of Florida

Administrative Code Rule 61 - 14.012(2) and , therefore , section

472.25(1)(e). The Respondent disputed the charges and requested

an administrative hearing.

At the hearing , the Division had Petitioner's Exhibits 1

through 23 admitted in evidence and called the following

witnesses: Virginia Covington; Patric Zwolenski; and Lisa Arena.

The Respondent called David McClure, Harry Karim, Blair Newton,

testified himself, and ha d Respondent's Exhibits 5 through 19

admitted in evidence. The Transcript of the final hearing was

filed, and the parties filed proposed recommended orders that

have been considered.

FINDING S OF FACT

1. The Respondent, Mounir Albert El Beyrouty, is licen sed

as a real estate broker in Florida, having been issued license

no. BK 596936. He is the qualifying broker for Intermab, Inc.,

d/b/a Byblos Beach Realty.

2. Acting through the real estate brokerage he qualified,

Intermab, Inc., the Respondent orall y agreed with Virginia

Covington to manage apartment Unit 1 - E, Redington Tower 3,

located at 17940 Gulf Boulevard in Redington Shores , Florida .

Initially, Covington, who is a federal district judge, was the

personal representative and sole beneficiary of her mother's

estate, which owned the unit; after probate, Judge Covington

became the owner of the unit.

3. The Respondent and Judge Covington agreed orally that

the Respondent would try to lease the apartment on an annual

basis at a lease rate of $850 p er month, less a 15 percent

commission to the Respondent. Although the Respondent was unable

to secure such a lease, he intentionally misled Judge Covington

to think there was such a lease and , in January 2008 , began

paying her $722.50 per month by check drawn on his brokerage

operating account. He did this because he wanted her to think

highly of his abilities as a real estate broker in the hopes that

she would retain him to list the property when she decided to

sell.

4. Not long after he began sendin g monthly checks, the

Respondent told Judge Covington that a leak in the kitchen sink

should be repaired and a stained mattress should be replaced. He

got her permission, took care of both items, and was reimbursed.

However, he perceived that Judge Covin gton did not want to put

additional money into the apartment unnecessarily and decided to

avoid these kinds of conversations and dealings with her.

Instead , he began to expend his own funds to maintain and upgrade

the property as he saw fit without tellin g her.

5. The Respondent secured a paying tenant for the apartment

for six weeks during February and March 2008. He collected a

$500 security deposit and $5,250 in rent, all of which he

deposited in the brokerage operating account. He did not tell

Jud ge Covington about the seasonal renter. Instead, he kept

paying her $722.50 per month and continued to lead her to believe

there was an annual lease for $850 a month. When the seasonal

renter left, the Respondent continued to pay Judge Covington

$722.50 per month.

6. In April 2008, the Respondent allowed friends to stay in

Judge Covington's apartment free of charge and without paying a

security deposit. He did not tell Judge Covington, rationalizing

that he was paying her the $722.50 per month she thou ght was her

share of the annual lease payments.

7. The Respondent secured a paying tenant for the apartment

for January, February, and March 2009. He collected a $500

security deposit and $9,000 in rent, all of which he deposited in

the brokerage opera ting account. He did not tell Judge Covington

about the seasonal renter. Instead, he kept paying her $722.50

per month and continued to lead her to believe there was an

annual lease for $850 a month. When the seasonal renter left,

the Respondent continu ed to pay Judge Covington $722.50 per

month.

8. The Respondent secured a paying tenant for the apartment

for January, February and March 2010. He collected a $500

security deposit and $9,000 in rent, all of which he deposited in

the brokerage operating account. He did not tell Judge Covington

about the seasonal renter. Instead, he kept paying her $722.50

per month and continued to lead her to believe there was an

annual lease for $850 a month. When the seasonal renter left,

the Respondent continued to pay Judge Covington $722.50 per

month.

9. In July 2010, the Respondent was able to lease the

apartment for a year at a monthly rent of $1,300. He also

collected a $1,000 security deposit. He deposited this money in

the brokerage operating account. He did not tell Judge Covington

about the seasonal renter. Instead, he kept paying her $722.50

per month and continued to lead her to believe there was an

annual lease for $850 a month.

10. In November 2010, Judge Covington told the Respondent

to tell the tenant she wanted to increase the annual lease rate

to $935 a month. The Respondent continued to lead her to believe

there was an annual lease for $850 a month and told her that he

would advise the supposed tenant of the rent increase. Instead ,

he kept collecting $1,300 a month from the tenant and began

paying Judge Covington $794.75 a month (the $935, less a

15 percent commission). He did not tell her there actually was

an annual lease for $1,300 a month.

11. The $1,300 annual lease was not renewed i n July 2011.

The Respondent continued to pay Judge Covington $794.75 a month

and to lead her to believe there was an annual lease for $935 a

month.

12. In about June 2011, Judge Covington decided to sell her

apartment. As the Respondent hoped and plann ed, she listed it

with his brokerage. Judge Covington asked the Respondent to

notify the supposed annual tenant, who she believed had been

living in the apartment since December 2007 , to make sure the

tenant would be agreeable to a month - to - month lease du ring their

efforts to sell. The Respondent continued to lead Judge

Covington to believe there was such an annual tenant and assured

her that he would be able to convince the tenant to cooperate

with her plan to sell.

13. From August 29 through October 5 , 2011, the Respondent

allowed friends to stay in Judge Covington's apartment free of

charge and without paying a security deposit. He did not tell

Judge Covington, rationalizing that he was paying her the $794.75

per month she thought was her share of th e annual lease payments.

14. In November and December 2011, the Respondent rented

Judge Covington's apartment to the sister of the court clerk for

$850 a month without requiring a security deposit. He did not

tell Judge Covington about this rental.

15. The Respondent secured paying tenants for the apartment

for February, March and April 2012. He collected a $500 security

deposit and $9,000 in rent, all of which he deposited in the

brokerage operating account. He did not tell Judge Covington

about the seasonal renter. Instead, he kept paying her $794.75 a

month and led her to believe there was an annual lease for $935 a

month.

16. Despite several price reductions, the Respondent was

unable to sell the apartment, and Judge Covington decided to

switch selling brokers. In February 2012, she signed a listing

agreement with another real estate broker.

17. Later in February 2012, a real estate salesperson

showed Judge Covington's apartment to a prospective purchaser.

Upon questioning, an older woman tol d the salesperson that they

were paying $3,000 a month in rent. The Respondent told the

salesperson to disregard the information because the woman was

not thinking straight, or words to that effect, because her

husband had been ill. He also told her that the woman's son was

actually paying the rent.

18. The salesperson related this information to Judge

Covington and also told her that she noticed that the residents

were not the same people she happened to see in the apartment on

one occasion in February 2012. Upon receiving this information,

Judge Covington beca me suspicious that the Respondent had been

dishonest and misleading her. She contacted the State Attorney's

Office and the Division regarding the process for filing a

complaint against the Respo ndent. She also arranged for a

meeting with the Respondent. When she met with the Respondent,

she brought a forensic accountant to review the Respondent's

records. The Respondent told them he was sorry that Judge

Covington was upset with him , but that h e did not owe her any

money -- to the contrary, that she owed him money. However, he

told them he was being audited by the Division and was unable to

provide supporting documentation.

19. At the final hearing, the Respondent provided a ledger

to support h is position that all the rent he collected belonged

to him alone because Judge Covington owed him money throughout

his dealings with her due to his payments to her , regardless

whether her apartment was rented , and the money he spent to

maintain and improve the apartment. (This was an after - the - fact

justification for his failure to deposit any security deposits or

rental payments into his escrow account when, in fact, he did not

do so because he did not know it was required.)

20. There is reason to believe that the ledger is not

entirely accurate. For example, the Respondent omitted rent

collected from at least one occupant of the apartment. It also

does not account for the times the Respondent allowed friends and

relatives to stay there free of charge, e ssentially acting as if

he owned the apartment. Although the Respondent's testimony

regarding the money he paid to maintain and improve the apartment

is accepted, his failure to timely apprise Judge Covington

regarding those expenditures makes it difficul t to be certain

about it. Finally, even accepting the ledger at face value, it

shows that there were times when the Respondent owed Judge

Covington, and not vice - versa.

21. The Division attempted to make a case that the

Respondent intended to and attemp ted to steal rental proceeds.

It is unlikely that the Respondent actually targeted a federal

judge to victimize in that way. It is more likely that the

Respondent was attempting to impress Judge Covington with his

skill and expertise as a real estate bro ker and , ultimately , to

be rewarded with the listing on the property when it was sold.

In so doing, the Respondent flagrantly violated several laws and

rules regarding his professional responsibilities as a licensed

Florida real estate broker.

22. Respond ent has been a licensed real estate broker for

many years and depends on his license to make a living to support

himself and his family. He has no prior disciplinary record.

However, it has become known in this case that , over the years,

he consistently has failed to use his escrow account for rental

deposits and proceeds because he did not know it was required.

CONCLUSIONS OF LAW

23. Since this is a license discipline case, the Department

must prove its allegations by clear and convincing evidence.

De p't of Banking & Fin. v. Osborne Stern & Co. , 670 So. 2d 932

(Fla. 1996); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

The Supreme Court has stated:

Clear 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 testimony must

be precise and lacking in confusion as to the

facts in issue. The evidence must be of such

a weight that it produces in the mind of the

trier of fact a firm belief or convictio n,

without hesitancy, as to the truth of the

allegations sought to be established.

In re Henson , 913 So. 2d 579, 590 (Fla. 2005)(quoting Slomowitz

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

24. In Count I, the Division charged the Respondent

essentially with failure to deliver rental proceeds on the

Covington property, in violation of section 47 5 .25(1)(d ) . The

evidence was clear and convincing that the Respondent violated

this statute -- albeit, in a roundabout manner that was peculiar

and com plicated.

25. In Count II, the Division charged the Respondent with

violating 475.25(1)(b) by: fraud ; misrepresentation ;

concealment ; false promises ; false pretenses ; dishonest dealing

by trick, scheme, or device ; culpable negligence ; or breach of

trust . The evidence was clear and convincing that the Respondent

was guilty of all those offenses (even though it was not proven

that the Respondent intended to steal rental proceeds from Judge

Covington).

26. In Count III, the Division allege d that the Resp ondent

failed to deposit rental deposits and proceeds in escrow, in

violation of section 47 5 .25(1(k). The evidence was clear and

convincing that the Respondent did not put any Covington rental

deposits or proceeds in escrow. The Respondent argues that by

the time he received the rental deposits or proceeds, and every

succeeding time he received any, he was owed money by Judge

Covington, so no rental deposits or proceeds ever were required

to be placed in escrow.

27. The Respondent's argument is wrong fo r numerous

reasons. First, it was conceived after - the - fact. Actually, the

Respondent did not place rental deposits and proceeds in his

escrow account because he did not know rental deposits and

proceeds were required to be placed in escrow. As a result, he

never deposited any rental deposits or proceeds into his escrow

account, not just on the Covington property. Second, even

accepting the Respondent's ledger of his dealings with the

Covington property, security deposits and advances on rentals not

yet earned did not belong to Judge Covington exclusively when the

Respondent failed to place them in escrow; the renters had a

contingent claim on them. Third, even accepting the Respondent's

ledger of his dealings with the Covington property , and

disregardin g the renters' claims to the money, the Respondent was

not , in fact , "owed" money by Judge Covington each and every time

he received rental deposits and proceeds. Finally, even

accepting the rest of Respondent's incorrect argument in its

entirety, the ren tal deposits and proceeds still should have been

put in escrow first and checks written out of the escrow account

to the Respondent to document the transactions. See Dreyer v.

Fla. Real Estate Comm'n , 370 So. 2d 95, 98 (Fla. 4th DCA 1979).

28. The Respo ndent argues that the Division should not be

allowed to prove Count III based on rental deposits and proceeds

on property other than the Covington property because the

Administrative Complaint contained specific allegations only as

to the Covington propert y. Notwithstanding the pleading

deficiencies, the Respondent was fully aware that the Division

intended to prove Count III based on rental deposits and proceeds

on property other than the Covington property. In addition, the

Respondent admitted to never plac ing any rental deposits or

proceeds in his trust account because he did not think it was

required. For that reason, he was not prejudiced by the pleading

deficiency .

29. In Count IV, the Division alleges that the Respondent

violated Florida Administ rative Code Rule 61J2 - 14.012(2) , and

therefore section 475.25(1)(e), by failing to reconcile his trust

account. This violation was proven by clear and convincing

evidence.

30. The Respondent contends that he did not violate rule

61J2 - 14.012(2) because he did not use the trust account.

However, the requirement of the rule is to compare total

liability with the trust account balances. The evidence was

clear that the Respondent had trust liabilities, and they did not

reconcile with the balances in his trus t account.

31. Under the disciplinary guidelines in rule

61J2 - 24.001(3), the normal range of discipline for the proven

violations are: for Count I, from suspension to revocation and

an administrative fine from $250 to $1,000 under paragraph (e);

for Cou nt II, from a 30 - day suspension to revocation and an

administrative fine from $1,000 to $2,500 under paragraph (c);

for Count III, from a 30 - day suspension to revocation and an

administrative fine from $250 to $1,000 under paragraph (l);

and for Count IV, from a 30 - day suspension to a five - year

suspension and an administrative fine from $250 to $1,000 under

paragraph (f). In addition to other disciplinary penalties, a

licensee can be placed on probation for a period of time, subject

to conditions, which ma y include requiring the licensee: to

attend pre - licensure courses; to satisfactorily complete a

pre - licensure course; to attend post - licensure courses; to

satisfactorily complete a post - licensure course; to attend

continuing education courses; to take and pass the

state - administered examination; to be subject to periodic

inspections and interviews by a Division investigator; if a

broker, to place the license on a broker associate status; or, if

a broker, to file escrow account status reports with the Real

Estate Commission or with a D ivision investigator at prescribed

intervals. Fla. Admin. Code R. 61J2 - 24.001(2).

32. Under rule 61J2 - 24.001(4), aggravating or mitigating

circumstances that can justify a departure from the normal range

of discipline, if prov en by clear and convincing evidence,

include: the degree of harm to the consumer or public; the

number of counts in the administrative complaint; the licensee's

disciplinary history; th e status of the licensee at the time of

the offense; the degree of fi nancial hardship incurred by the

licensee from a fine or suspension; and a previous letter of

guidance.

33. The facts of this case do not justify a departure from

the normal range of discipline. However, consideration of the

facts relevant to that quest ion informs the appropriate

disci pline to impose within the normal range. In this case,

disci pline at the lower end of the normal range is appropriate,

with a suitable period of probation upon suitable conditions to

ensure the Respondent understands and c omports himself in

accordance with his duties and responsibilities as a real estate

broker.

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: fi nding the Respondent guilty as charged;

fining him $2,000; suspending his license for one year; and

placing him on probation for a suitable period of time and upon

suitable conditions.

DONE AND ENTERED this 5th day of August , 2013 , in

Tallahassee, Leon Co unty, Florida.

S

J. LAWRENCE JOHNSTON

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.d oah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of August , 2013 .

ENDNOTE S

1/ The caption is amended to specify the Division of Real Estate.

See 475.021, Fla. Stat. (2013).

2 / U nless otherwise noted , a ll statutory references are to

Florida Statutes (201 3 ) , which reflects the statutes in effect

during the relevant conduct of the Respondent. Likewise, all

rule references are to the version of the rule in effect during

the relevant time period .

COPIES FURN ISHED:

Juana Watkins, Director

Division of Real Estate

Department of Business and

Professional Regulation

Suite N801

400 West Robinson Street

Orlando, Florida 32801 - 1757

Darla Furst, Chair

Real Estate Commission

Department of Business and

Professio nal Regulation

Suite N801

400 West Robinson Street

Orlando, Florida 32801 - 1757

J. Layne Smith, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Bruce J. Robbi ns, Esquire

Law Office of Bruce J. Robbins

509 South Martin Luther King, Jr. Avenue

Clearwater, Florida 33756 - 5607

Magdalena Ozarowski, Esquire

Joshua Kendrick, Esquire

Department of Business

and Professional Regulation

Suite 42

1940 North Monroe Stree t

Tallahassee, Florida 32399 - 2202

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the ag ency that

will issue the Final Order in this case.