13-001834PL Department Of Business And Professional Regulation, Florida Real Estate Commission vs. Dennis Mauricio Meraz Status: Closed Recommended Order on Tuesday, September 10, 2013.

Summary: Respondent is liable for associate's not depositing money in escrow and for brokerage's not refunding money. Respondent is also liable for not supervising associate. His broker's license should be revoked for intent not to engage in brokerage business.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION, FLORIDA

REAL ESTATE COMMISSION,

Petitioner,

vs. Case No. 13 - 1834PL

DENNIS MAURICIO MERAZ,

Respondent.

/

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing on

July 22 - 23, 2013, by videoconference in Tallahassee, West Palm

Beach, and Miami, Florida.

APPEARANCES

For Pe titioner: Susan Leigh Matchett, Esquire

Daniel Brackett, Esquire

Magdalena Ozarowski, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Stree t, Suite 42

Tallahassee, Florida 32312

For Respondent: Nancy Pico Campiglia, Esquire

Your Town e Law, P.A.

80 Bonnie Loch Court

Orlando, Florida 32806

STATEMENT OF THE ISSUE S

The issues are w hether Respondent has violat ed Florida

Administrative Code R ule 61J2 - 14.010(1) and section 475.25(1)(e)

and (k), Florida Statutes, by failing to place immediately into

escrow a security deposit of $5482 ; violated section

475.25(1)(u) by not being involved with the daily operations of

Advantage International Realty, Inc. (AIR), by being hired to

qualify AIR and receiving payment from AIR, and failing to

direct, control or manage Jennifer Briceno, a sales associate

employed by Respondent, w hile she provided real est ate services

to two individuals; and violated section 475.25(1)(d)1 . by

failing to refund $5308 upo n demand by Mr. Mansour and

Ms. Haddad on December 20, 2011. If so, an additional issue is

the penalty that should be imposed.

PRE LIMINARY STATEMENT

The Amended Administrative Complaint alleges that

Respondent was the qualifying broker for AIR from November 8,

2011, through December 6, 2012. During this time, Jennifer

Briceno was allegedly a licensed real estate sales associat e

empl oyed by Respondent.

The Amended Administrative Complaint alleges that, in

November 2011, Ms. Briceno helped Morris Mansour and Jackie

Haddad procure a lease from December 15, 2011, through April 15,

2012, for 5200 North Ocean Boulevard, Apartment 706, Fort

Lauderdale, Florida (Lease).

The Amended Administrative Complaint alleges that, on or

about November 16, 2011, Mr. Mansour wired about $5842 to AIR ' s

Bank of America operating account, ending in 6220, as the

security deposit for the Lease. The Amended Ad ministrative

Complaint alleges that Respondent did not promptly deposit this

check into AIR ' s escrow or trust account. After the lease

agreement failed to close, Mr. Mansour, on or about November 29,

2011, signed and faxed a release, which stated that AIR would

return to him the security deposit -- less wire and application

fees.

The Amended Administrative Complaint alleges that, when he

did not receive a refund of the security deposit, Ms. Haddad

sent an email to Respondent on December 20, 2011, demanding t he

return of his security deposit. But Respondent allegedly did

not return the security deposit to Mr. Mansour or Ms. Haddad.

The Amended Administrative Complaint alleges that

Petitioner conducted an office inspection and escrow account

audit of AIR on Ja nuary 5, 2012. The inspection and audit

allegedly failed to reveal that AIR maintained an escrow

account, but allegedly revealed that AIR maintained an operating

account ending in 6220.

The Amended Administrative Complaint alleges that, on

January 31, 201 2, Respondent cashed a check from AIR, drawn on

its operating account ending in 6220, in the amount of $1610.

The Amended Administrative Complaint alleges that, on

February 27, 2012, during an interview with one of Petit i oner ' s

investigators, Respondent ad mitted that he was not involved with

the day - to - day operations of AIR and had been hired merely to

qualify the company.

The Amended Administrative Complaint alleges that, on

May 1, 2012, Respondent cashed a check from AIR, drawn on its

operating account ending in 6220, in the amount of $3225.

Count One of the Amended Administrative Complaint alleges

that Respondent failed to immediately place into escrow the

security deposit and thus violated rule 61J2 - 14.010(1) and

section 475.25(1)(e) .

Count Two alleges that Respondent failed to immediately

place into escrow the security deposit and thus violated sectio n

475.25(1)(k) .

Count Three alleges that Respondent was not involved with

the daily operations of AIR, was hired to qualify AIR and

receive payments from the company, and failed to direct, control

or manage Ms. Briceno when, as a sales associate employed by

Respondent, she provided real estate services to Mr. Mansour and

Ms. Haddad and thus violated section 475.25 (1)(k) and (u) .

Count Four alleges that Resp ondent failed to deliver the

security deposit to Mr. Mansour or Ms. Haddad on demand on

December 20, 2011, and thus violated section 475 .25(1)(d)1 .

Respondent timely requested a hearing.

At the hearing, Petitioner called six witnesses and offered

into ev idence 25 exhibits: Petitioner Exh ib its 1 - 5, 7 - 22, and

24 - 27. Respondent called one witness , who declined to complete

his testimony, and offere d into evidence no exhibits. The

Administrative Law Judge had disregarded the testimony of

Respondent ' s lone w itness, who essentially decided not to

testify about his experience with Ms. Briceno for fear of

prosecution by Petitioner. All exhibits were admitted.

The court reporter filed the transcript on August 9, 2013.

Petitioner filed its proposed recommended o rder on August 19,

2013. Due to a n emergency in volving a member of counsel ' s

family, Respondent timely filed his proposed recommended order

on August 26, 2013.

FINDING S OF FACT

1. At all material times, Respondent has been a licensed

real estate broker, holding license number s 69 234 and 3093422 .

He has never been disciplined.

2. Licensed as a sales associate since 2000, Respondent

served as a sales associate with three brokers. Licensed as a

real estate broker in 2002, Respondent served as a broker

a ssociate with two brokers until, in August 2002, Respondent

served as the broker for his first real estate brokerage.

He served as a broker for two brokerages, much of the time

simultaneously, from 2002 - 05 and 2007 - 09. For the last five

months of 2008, Respondent worked as a broker sales associate

for a third brokerage, and, from 2009 - 11 , Respondent was

registered as a sole proprietorship broker.

3. From November 14, 2011, through January 6, 2012,

Respondent served as the broker for AIR. On November 7, 2011,

Respondent was listed as a director of AIR with the Department

of State, Division of Corporations.

4. AIR became licensed as a Florida real estate brokerage

on November 14, 2011 , holding license number 104302. Respondent

was the qualifying bro ker of AIR from November 14, 2011, to

January 6, 2012. No longer a brokerage after Respondent

resigned as its qualifying broker, AIR resumed operations as a

brokerage on March 1, 2012, when Jennifer Briceno served as the

qualifying broker. She served in this capacity until March 4,

2013, at which point Petitioner suspended the licenses of AIR

and Ms. Briceno by separate emergency orders.

5. Ms. Briceno was first licensed as a sales associate in

2008. She served as a sales associate with an unrelated

c orporation in Tamarac, Florida from May 28, 2008, to

October 24, 2011. Her license was inactive until November 14,

2011, on which date she became a sales associate with AIR.

On February 17, 2012, she became licensed as a broker and served

as a broker a ssociate with AIR until March 1, 2012, at which

time she served as its qualifying broker.

6. As noted in paragraph four, from January 6 to March 1,

2012, AIR ' s brokerage license became invalid due to the lack of

a qualifying broker. As noted in paragra ph five, Ms. Briceno

served at AIR as a sales associate from January 6, 2012 , and

then as a broker associate from February 17, 2012, until

March 1, 2012 -- an eight - week period during which AIR ' s brokerage

license was invalid due to its lack of a qualifying broker.

7 . On November 7, 2011, Respondent was listed as a

director of AIR with the Department of State, Division of

Corporations. At no time was Respondent ever a signatory on the

operating account of AIR.

8 . Jackie and Sam Haddad and Morris Mansour a re residents

of Canada and friends . They decided that they wanted to enter

into a lease of a residence in Fort Lauderdale for a vacation

during the winter of 2011 - 12 . They agreed that

Mr. and Ms. Haddad would occupy t he residence for two month s ,

and Mr. Mansour would occupy the residence for the ensuing two

month s . For the sake of simplicity, they agreed that

Mr. Mansour would take in his name the lease for the entire four

months , which was to run from December 15, 2011, through

April 15, 2012 .

9. Ms . Haddad fou nd the subject property on the I nternet

and got in touch with Ms. Briceno at an unspecified point in

time. At some point, Ms. Briceno sent to Mr. Mansour a blank

Agreement to Enter into a Lease and asked him to complete, sign,

and return the f orm to her with a check for the entire rent.

Mr. Mansour objected to paying the entire rent and asked that he

be allowed to pay half at that time and half upon occupancy.

Ms. Briceno agreed. Accordingly, o n November 12, 2011,

Mr. Mansour wired $5500 to AIR and faxed to Ms. Briceno a

completed Agreement to Enter into a Lease.

10. AIR did not have an escrow account. Although there

was a listing broker for the rental property, Ms. Briceno did

not give the deposit check to her . Nor did Ms. Briceno pres ent

the funds to AIR ' s qualifying broker. It appears that

Ms. Briceno conducted this real estate business and received the

funds prior to AIR ' s obtaining a qualifying broker. In any

event, it appears that Ms. Briceno deposited the funds in AIR ' s

operati ng account.

11. However, on November 12, 2011, Ms. Briceno faxed the

signed Agreement to Enter into a Lease to a sales associate of

the listing broker. The net of $5482 posted on AIR ' s general

operating account on November 16. On the same day, AIR ' s ban k

statement shows a " counter debit " of $5010. From November 16

through the end of January 2012, this account never had

sufficient funds to repay the $5500 or net $5482.

12 . After receiving the offer to lease from Ms. Briceno ,

the sales associate of the listing broker spoke with the owner

and learned that the cost of short - term insurance precluded a

lease for less than one year. By email dated December 1, t he

sales associate informed Ms. Briceno that the owner would not

accept the offer.

13. After no t hearing from Ms. Briceno for some time,

Ms. Haddad and Mr . Mansour tried to reach Ms. Briceno, but

repeated calls to her business and cellphone numbers went

unreturned. Mr. Mansour, who intended to occupy the subject

property first, finally contacted t he sales associate of the

listing broker and learned that the offer had not been accepted.

14. At some point, Darwin Briceno, Ms. Briceno ' s husband,

became involved. By email to Ms. Mansour dated November 29,

2011, Mr. Briceno sent a release covering a refund of $5308, net

wire fees and an application fee. On December 8, Ms. Haddad

sent an email to someone at AIR stating that they were still

waiting for their refund of $5308. Getting no response and

having learned R espondent ' s name in the interim Ms. Haddad re -

sent the December 8 email to the administrator of AIR --

attention: Respondent -- and warned that they would retain

counsel if they did not hear from Respondent within 24 hours.

15. No one heard from Respondent, who cashed AIR checks on

January 3 1 and May 1 in the amounts of $1610 and $3225,

respectively. On February 24, 2012, Mr. Briceno sent

Mr. Mansour an AIR check in the amount of $5308, but it bounced.

The Haddads and Mr. Mansour have never recovered any of their

deposit.

16. During the in vestigation, Respondent admitted to

Petitioner ' s investigator that he was not involved with the day -

to - day operation of AIR, and he did not know anything about how

AIR had handled the money that Mr. Mansour had sent. Respondent

specifically admitted that he was a " broker for hire " at AIR,

meaning that he had rented his broker ' s license to qualify AIR

as a real estate brokerage.

17. Respondent ' s lack of involvement in the business of

AIR is confirmed by Karrell Brett, whom Mr. Briceno hired, on

behalf of AIR, as a sales associate, as of December 9, 2011,

Ms. Brett interviewed with Mr. Briceno, not Respondent. While

employed by AIR, Ms. Brett did not know Respondent and believed

her broker was Mr. Briceno. Although Ms. Brett decided on her

own to advise her clients to deposit any escrow funds with a

title company, she never received any instruction from

Respondent to deposit escrow funds with a title company.

18. Respondent never made any attempt to supervise any

sales associate or other employee of A IR in the conduct of real

estate business on behalf of the corporation that Respondent had

qualified as a real estate brokerage. Respondent had been the

qualifying broker for two days when the deposit was posted to

AIR ' s account; he was responsible for AI R ' s failure to account

for this money from the point of deposit forward until his

resignation. Likewise, Respondent had been the qualifying

broker for about six weeks when he received the latter of

Ms. Haddad ' s emails demanding a refund of the deposit.

Respondent did not ensure that AIR refunded the deposit at that

time.

CONCLUSIONS OF LAW

19 . DOAH has jurisdiction over the subject matter.

§§ 120.569 and 120.57(1), Fla. Stat.

20. Section 475.25(1) provides in part:

The commission may deny an applic ation 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:

* * *

(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, including

a share of a real estate commission if a

civil judgment relating to the practice of

the li censee ' 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.

. . .

(e) Has violated any of the provisions of

this chapter or any lawful order or rule

ma de 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 som e 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 . . . . The commission shall

establish rules to provide for records to be

mai ntained by the broker and the manner in

which such deposits shall be made. . . .

* * *

(u) Has failed, if a broker, to direct,

control, or manage a broker associate or

sales associate employed by such broker. A

rebuttable p resumption exists that a broker

associate or sales associate is employed by

a broker if the records of the department

establish that the broker associate or sales

associate is registered with that broker. A

record of licensure which is certified or

authen ticated in such form as to be

admissible in evidence under the laws of the

state is admissible as prima facie evidence

of such registration.

21. Florida Administrative Code Rule 61J2 - 14.010(1)

states:

Every broker who receives from sales

associates, prin cipals, prospects, or other

persons interested in any real estate

transaction, any deposit, fund, money,

check, draft, personal property, or item of

value shall immediately place the same in a

bank, savings and loan association, trust

company, credit union or title company

having trust powers, in an insured escrow or

trust account. The broker must be a

signatory on all escrow accounts. If the

brokerage entity has more than one broker

licensee, then one broker licensee may be

designated as the signatory. If the deposit

is in securities, intended by the depositor

to be converted into cash, the conversion

shall be made at the earliest practical

time, and the proceeds shall be immediately

deposited in said account.

22 . Petitioner must prove the material a llegations by

clear and convincing evidence. Dep ' t of Bank. & Fin. v. Osborne

Stern & Co. , 670 So. 2d 932 (Fla. 1996).

23 . Clearly, AIR has violated section 475.25(d)1. and (k)

in its mishandling of the deposit that it received from

Mr. Mansour. The qu estion is whether Respondent is responsible

for these violations.

24 . The transaction evidently was negotiated prior to

Respondent ' s assumption of the duties of a qualifying broker --

and prior to AIR ' s authority to engage in real estate brokerage

business. Mr. Mansour wired the money two days before

Respondent became AIR ' s qualifying broker. But this

international wire transfer did not post on AIR ' s account until

two days after Respondent became AIR ' s qualifying broker.

25 . This case does not raise the issue of whether

Respondent may be held strictly liable for the mishandling of

the $5500 deposit. Respondent has been a licensed real estate

professional for 13 years -- the past 11 as a broker. Respondent

knew that AIR was engaged in real estate business , but had no

idea how AIR handled its escrow monies , nor does it appear that

he entered into this relationship with AIR with any intention of

doing anything but cashing an occasional check that AIR sent him

for the use of his broker ' s license . During the two days that

he was the qualifying broker, Respondent had ample time to

undertake his obligations by the time that the $5500 deposit

posted, but it would not have mattered if he had had 60 days -- he

never intended to assume these obligations. Respondent ' s

failure was not merely negligent and reckless; it was

intentional.

26 . Respondent ' s failure to account for or deliver the

deposit upon demand in late December is another failure to

discharge his professional obligations. His failure even to

contact Ms . Haddad after receipt of an email directed to him at

the email address of AIR ' s administrator is either a direct

failure on Respondent ' s part , if he received the email, or, if

he did not, a reflection of the conditions he had created by

renting his broker ' s license to AIR. In this manner, again,

Respondent ' s failure in this regard was, under either scenario,

intentional, not merely negligent and reckless.

27 . Lastly, Respondent fail ed to supervise and control

Ms. Briceno or any other professional emplo yees of AIR during

Respondent ' s brief te nure as its qualifying broker. As to this

matter too, Respondent ' s failure was intentional, not merely

negligent and reckless. Respondent ' s sole record activity in

connection with AIR appears to have been to have f iled the

necessary documentation to serve as its qualifying broker, to

have cash ed a couple of AIR checks , and to have file d the

necessary documentation to resign as AIR ' s qualifying broker

after a couple of months.

28 . Through Respondent ' s intentional di sregard of his

professional obligations, as well as negligence and

recklessness, Respondent helped AIR defraud three persons of

their $5500 deposit -- in return for payments of an unspecified

amount of " rent " for his broker ' s license. The public has been

da maged, and Respondent has failed to make restitution on his

violations. This last failure suggests a serious lack of

insight and raises the probability that, if Respondent remains

licensed, this kind of fraud may be perpetrated again by another

brokerage that he decides to qualify without any attempt to

discharge his professional obligations.

RECOMMENDATION

I t is RECOMMENDED that the Florida Real Estate Commission

enter a final order finding Responde nt guilty of Counts 2 , 3,

and 4, dismissing Count 1 as du plicative of Count 2 , and

revoking Respondent ' s real estate broker ' s license.

DONE AND ENTERED this 10th day of September , 2013 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSo to 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 10th day of September, 2013 .

COPIES FURNISHED :

Nancy Pico Campiglia, Esquire

Your Towne Law, P.A.

5465 Lake Jessamine Drive

Orlando, Florida 32839

Daniel Brackett , Esquire

Department of Business and

Professional Regulation

Suite 42

1940 North Monroe Street

Tallahassee, Florida 32399

J. Layne S mith, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Darla Furst, Chair

Real Estate Commission

Department of Business and

Professional Regulation

40 0 W est 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 b e filed with the agency that

will issue the Final Order in this case.