13-002042PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Theresia M. Helton Status: Closed Recommended Order on Thursday, November 21, 2013.

Summary: DPBR proved that Respondent, whose licenses had been suspended for similar offenses, violated several statutes and rules and should be revoked.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF REAL ESTATE ,

Petitioner ,

vs. Case No. 13 - 2042PL

THERESIA M. HELTON ,

Respondent .

/

RECOMMENDED ORDER

On September 13, 2013, a final administrative hearing was

held in this case by videoconference with sites in F ort Myers and

Tallahassee before J. Lawrence Johnston, Administrative Law

Judge, Division of Administrative Hearings.

APPEARAN CES

For Petitioner: Christina Ann Arzillo, Esquire

Alphonse Antonio Cheneler, Esquire

Department of Business and

Professional Regulation

Suite 42

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Respondent : Daniel Villazon, Esquire

Daniel Villazon, P.A.

Suite 535

5728 Major Boulevard

Orlando, Florida 32819 - 7962

STATEMENT OF THE ISSUE S

The issues in this case are whether, and how, the Florida

Real Estate Commission (FREC) should di scipline the Respondent,

Theresia Helton, on charges that she: failed to account and

deliver rental payments and deposits; was culpably negligent and

in breach of trust in her dealings regarding rental property;

failed to escrow rental payments and deposi ts; failed to properly

reconcile her escrow account; and failed to make transaction

agreements and bank statements available for inspection.

PRELIMINARY STATEMENT

The Petitioner, Department of Business and Professional

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

Administrative Complaint against the Respondent alleging: in

Count I, that she failed to account and deliver rental payments

and deposits, in violation of section 475.25(1)(d), Florida

1 /

Statut e s (2013) ; in Count II, that she was culpa bly negligent

and in breach of trust in her dealings regarding the rental

property, in violation of section 475.25(1)(b); in Count III,

that she failed to escrow rental payments and deposits, in

violation of section 475.25(1)(k); in Count IV, that the

viol ations alleged in Count III also violated Florida

Administrative Code Rule 61J2 - 10.010(1) and, therefore, section

475.25(1)(e); in Count V, that she failed to properly reconcile

her escrow account, in violation of rule 61J2 - 14.012(2) and,

therefore, sectio n 475.25(1)(e); and, in Count VI, that she

failed to make transaction agreements and bank statements

reflecting deposits available to the Division ' s investigator, in

violation of rule 61J2 - 14.012(1) and, therefore, section

475.25(1)(e). The Respondent dis puted the charges and requested

an administrative hearing. However, at the final hearing, the

Respondent admitted the violations alleged in Counts III, IV,

and V.

At the hearing, Petitioner ' s Exhibits 1 through 14 were

admitted in evidence, and the Peti tioner called the following

witnesses: the Respondent; the owners/lessors, Ernest and Eileen

Armitage; the Division ' s investigator, Richard Kerans; and the

lessees, Laurie and James Ungar. The Respondent testified in her

case, and Respondent ' s Exhibit 6 was 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. At the time of the events giving rise to the

Administrative Complaint in this case, t he Respondent, Theresia

Helton, held two Florida real estate broker licenses (BK 3077530

and BK 3248280) and was the owner and qualifying broker for

1010 Apartments, Inc., a real estate brokerage firm. However, on

May 22, 2013, FREC entered a Final Order suspending those

licenses for five years. The Final Order is on appeal by the

Division, which seeks to revoke the Respondent ' s licenses, as

recommended by the Administrative Law Judge in that case.

2 . Eileen and Ernest Armitage ( " the Armitages " ) reside in

New Jersey and own a condominium located at 15599 Latitude Drive,

Bonita Springs, Florida ( " the property " or " condo " ). In 2010,

the Armitages began communicating with the Respondent and asked

her to find a tenant for the property. In return for the

R espondent ' s services, the Armitages verbally agreed to pay her a

commission of ten percent of the annual gross rent.

3 . In September 2010, the Respondent obtained a tenant,

Marion Ward Bentson, to rent the property for $1,400 a month and

pay a security deposit in the amount of one month ' s rent. The

Respondent filled in a form lease to begin on September 14 of

that year. On September 8, 2010, the lease was signed by

Ms. Bentson and by the Respondent on behalf of the Armitages (in

one place as their agen t, and in another as landlord). The

Respondent collected the $1,400 security deposit and $700

prorated first month of rent from Ms. Bentson. The lease

directed the tenant to mail future rent payments to " Ilene [sic]

Armitage/1010 Apartments, Inc. " at the brokerage ' s address in

Naples. The Respondent then submitted the lease to the

homeowners association (HOA) for approval. The lease was

approved by the HOA on September 14, 2010, and became effective

on that date. The Respondent kept the $2,100 collecte d from the

tenant in payment of the $1,680 commission, plus other charges.

4 . Some details of the 2010 transactions remain unclear.

The Armitages testified that the Respondent sent the lease to

them and that they made corrections, signed the corrected lease,

and returned it to the Respondent. The Respondent testified that

the HOA sent the lease to the Armitages after approval and that

no corrected lease signed by the Armitages was returned to her.

5 . A corrected lease was introduced in evidence. It

indicates that Eileen Armitage corrected the spelling of her

name, clarified that the Armitages were the landlord under the

lease, clarified that future rent and notices were to be sent to

the Armitages in New Jersey, initialed the changes, and signed

the corrected lease on September 15, 2010.

6 . The corrected lease apparently was not presented to the

HOA for approval, and it is not clear what happened to it. It

is, however, clear from the evidence that the parties ' subsequent

conduct was consistent wi th the corrected lease, and that the

Armitages had no complaints about the Respondent ' s conduct with

respect to the Bentson lease.

7 . In July 2011, Ms. Bentson stopped paying rent and gave

notice that she was moving out. The Armitages contacted the

Re spondent and asked her to help them find a tenant to replace

Ms. Bentson. It was agreed verbally, or assumed, that the

Respondent again would be paid a commission of ten percent of the

annual gross rent. The Armitages testified that there also was a

verb al agreement that the commission on the Bentson lease would

be prorated, entitling the Armitages to a refund. The Respondent

denied that there was any agreement to prorate the Bentson lease

commission. On this disagreement, the Respondent ' s testimony was

more believable. The Armitages remained in communication with

the Respondent while she attempted to find a new tenant.

8 . At the end of August 2011, Laurie Ungar contacted the

Respondent regarding the Armitage property, and the Respondent

arranged for Mrs. Ungar to see the condo. Mrs. Ungar noted that

there were scuff marks on the walls, trash that needed to be

removed, and carpet and a patio deck that needed cleaning. She

expressed her interest in renting the condo, if those items were

corrected. T he Respondent reported to the Armitages, who were

under the impression that the condo already was in good condition

and did not agree to spend money for additional repairs. The

Respondent decided to proceed with the lease negotiations and

arrange for what ever work would be needed to satisfy the Ungars.

9 . T he Respondent met with Mrs. Ungar on August 31, 2011,

and negotiated on behalf of the Armitages. The Respondent filled

in a form lease to begin on September 21, 2011. Mrs. Ungar

signed for herself a nd her husband and gave the Respondent a

check for $75 for the HOA application fee. The lease identified

" Ilene [sic] Armitage " as landlord and provided for notices to be

sent to her, although no contact information was included for

her. The Respondent s igned as landlord in one place on the form

and as agent in another. She also initialed the lease as

landlord. By checks dated September 1, 2011, Mrs. Ungar gave the

Respondent $500 for the first month ' s prorated rent, $1,500 for

the following month ' s ren t, a security deposit in the amount of

$1,500, and a pet security deposit in the amount of $250.

1 0 . The Respondent reported to the Armitages that the

Ungars signed the lease. She then sent someone to touch up the

scuff marks on the walls and clean up t he apartment. Either the

Armitages or the HOA apparently asked for a pet fee from the

Ungars, which they delivered to the Respondent by check dated

September 13, 2011. The Respondent then submitted the lease to

the HOA for approval. The lease was approv ed by the HOA on

September 19 , 2011 . The Ungars moved in at 3 a.m. on

September 21, 2011.

1 1 . When the Ungars arrived, they still were dissatisfied

with the condition of the condo. The walls had been touched up

with the wrong color paint , so it looked like graffiti. There

was still trash at the condo, and the patio deck and carpet still

needed cleaning, in their opinion. They contacted the

Respondent, who came over with a can of paint and removed some of

the trash. The Ungars remained very dissatisfi ed with the

condition of the condo.

1 2 . Shortly after the Ungars moved in, the Armitages began

asking the Respondent for a copy of the lease. For reasons not

clear from the testimony, they did not receive the lease or any

money from the Respondent and b ecame increasingly agitated about

it.

1 3 . At the end of the month, the Armitages received a final

bill from the utility company. When they inquired, they were

told that the utilities had been transferred to another payor,

who was occupying the condo. T hey contacted the Ungars directly,

and the Ungars told them that they still were dissatisfied with

the condition of the condo and wanted to terminate the lease at

the end of October and get their deposits refunded. The

Armitages told them that they did no t have the deposits, as the

Respondent still had not forwarded them any money. Mr. Ungar

went to the Respondent ' s office, told her about the conversation

with the Armitages, and demanded a refund of the deposits. She

told him she already had sent the mon ey to the Armitages.

1 4 . On October 6, 2011, the Respondent emailed the

Armitages to report her conversation with Mr. Ungar and tell them

it was up to them if they wanted to let the Ungars out of the

lease, but that she had earned her commission. She st ated that

she had cleaned up the condo for the Ungars after the Armitages

had declined and had mailed the Armitages a check for $1,500,

which was what was left of the moneys paid by the Ungars after

deducting her commission in the amount of $1,800, a clean ing fee

of $150, another $150 for pressure - washing the patio deck, a

painting fee of $200, and another fee of $200 for cleaning and

hauling out trash. There was no evidence that those sums

actually were incurred by the Respondent or that any of the work

h ad been done, except for the poor touch - up of the scuff marks on

the walls.

1 5 . After the Respondent sent the email, she thought better

of sending the $1,500 check since both the Armitages and the

Ungars were claiming it. The money remained in her opera ting

account. She believed she was entitled to keep the balance of

the $4,000 paid by the Ungars. She did not notify FREC of any

deposit dispute.

1 6 . On October 7, 2011, the Armitages emailed the

Respondent to again ask for a copy of the signed lease a nd

listing agreement. On October 10, 2011, they emailed to again

ask for the signed lease and ask for the invoices for the work

done (or at least contact information for the vendors). By email

dated October 12, 2011, they followed up to again request the

information. They got no response from the Respondent, except to

say that she did not mail the check referred to in the email on

October 6, 2011.

1 7 . The Armitages and Ungars renegotiated the lease. The

Armitages reduced the monthly rent to pay the Un gars for

painting, cleaning, and other work they did at the condo to make

it satisfactory to them.

1 8 . The Armitages sued the Respondent and settled for

$2,700, which was paid by check dated July 12, 2012. The

Armitages used $2,000 from the settlement t o return deposits to

the Ungars.

19. During the Division's investigation, the Respondent was

asked to provide a copy of her agreement with the Armitages and

her escrow bank account records. There were no such records.

Later, a subpoena was issued for th e records for the Respondent's

operating account, which were produced. There was no evidence

that the Division asked for the records for the operating account

before issuing the subpoena.

20 . The Respondent ' s license is suspended until May 21,

2018, becau se the Division proved charges that in the fall of

2010, she was culpably negligent , in violation of section

4 7 5.25(1)(b) , and failed to account and deliver , in viol ation of

section 475.25(1)(d)1.

2 1 . The Respondent is the single mother of two daughters,

whom she was supporting by income earned as a real estate broker,

as well as child support payments.

2 2 . The Division has incurred costs in the amount of $825

in prosecuting this case against the Respondent.

CONCLUSIONS OF LAW

2 3 . Since this is a lice nse discipline case, the Division

must prove its allegations by clear and convincing evidence.

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

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

The Supreme Court has stated:

Clea r 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 b e of such

a weight that it produces in the mind of the

trier of fact a firm belief or convicti o 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 , 42 9 So. 2d 797, 800 (Fla. 4th DCA 1983)).

2 4 . In Count I, the Division charged the Respondent with

failure to account and deliver with respect to the Armitage - Unger

transaction, in violation of section 4 7 5.25(1)(d). The evidence

was clear and convincing tha t the Respondent violated this

statute, which required a better accounting than given by the

Respondent and also required the Respondent to notify FREC of the

deposit dispute.

2 5 . In Count II, the Division charged the Respondent with

violating 475.25(1)( b) by culpable negligence or breach of trust.

This offense requires proof on an intentional act. See Munch v.

Dep ' t of Prof. Reg., Div. of Real Estate , 592 So. 2d 1136 (Fla.

1st DCA 1992). The evidence was clear and convincing that the

Respondent intent ionally engaged in the conduct that constituted

culpable negligence and breach of trust , in violation of the

statute.

2 6 . In Count III and IV, the Division alleg e d that the

Respondent failed to escrow rental payments and deposits, in

violation of section 475.25(1)(k) and rule 61J2 - 10.010(1) and,

therefore, section 475.25(1)(e). In Count V, it was alleged that

the Respondent failed to properly reconcile her escrow account,

in violation of rule 61J2 - 14.012(2) and, therefore, section

475.25(1)(e). The Resp ondent admitted those violations.

2 7 . In Count VI, the Division alleged that the Respondent

failed to make transaction agreements and bank statements

reflecting deposits available to the Division ' s investigator, in

violation of rule 61J2 - 14.012(1) and, t herefore, section

475.25(1)(e). The Respondent had no escrow account. The

Respondent produced the deposit slips and statements from her

operating account in response to a subpoena . The Division

contends that the operating account records were not produc ed

upon request, prior to the subpoena, but there was no proof of

that . There were no transaction agreements. For these reasons,

it was not proven that the Respondent violated rule

61J2 - 14.012(1) or, therefore, section 475.25(1)(e).

2 8 . Under the discip linary guidelines in rule

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

violations are: for Count I, which is a second violation of

section 475.25(1)(d), from suspension to revocation and an

administrative fine from $1,000 to $5,000, unde r paragraph (e);

for Count II, which is a second violation of 475.25(1)(b), from a

six - month suspension to revocation and an administrative fine

from $2,500 to $5,000, under paragraph (c); and for Counts III

and IV, from a 30 - day suspension to revocation a nd an

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

each violation.

2 9 . Under rule 61J 2 - 24.001(4), aggravating or mitigating

circumstances that can justify a departure from the normal range

of discipline, if proven by clear and convin cing evidence,

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

number of counts in the a dministrative c omplaint; the licensee ' s

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

the offense; the degree of financial hardship incurr ed by the

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

guidance.

30 . The facts of this case justify a penalty at the top of

the normal range of discipline -- specifically , revocation. The

Division appears to take into consideration the fin ancial

hardship on the Respondent and her children from the imposition

of a fine, in that no fine is being sought in addition to the

requested revocation of her license .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is R ECOMMENDED that the Florida Real Estate Commission

enter a final order: finding the Respondent guilty as charged in

Counts I through V of the Administrative Complaint; revoking her

licenses; and assessing costs in the amount of $825.

DONE AND ENTERED this 21st day of November , 2013 , in

Tallahassee, Leon County, 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.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of November , 2013 .

ENDNOTE

1/ Unless otherwise noted, all statutory references are to

Florida Statutes (2 013), 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 FURNISHED:

Juana Watkins, Director

Division of Rea l Estate

Department of Business and

Professional Regulation

Suite N801

400 West Robinson Street

Orlando, Florida 32801 - 1736

Darla Furst, Chair

Florida Real Estate Commission

Department of Business and

Professional Regulation

Suite N801

400 West Robin son Street

Orlando, Florida 32801 - 1736

J. Layne Smith, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Daniel Villazon, Esquire

Daniel Villazon, P.A.

Suite 5 35

5728 Major Boulevard

Orlando, Florida 32819 - 7962

Christina Ann Arzillo, Esquire

Alphonse Antonio Cheneler, Esquire

Department of Business and

Professional Regulation

Suite 42

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

NOTICE OF RI GHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case .