14-004148PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Catherine Lichtman Status: Closed Recommended Order on Thursday, June 11, 2015.

Summary: Real estate sales associates violated chapter 475, Florida Statutes, including failure to return a deposit to a person entitled, as set forth in the administrative complaints, and should be assessed administrative fines and have their licenses revoked.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF REAL ESTATE ,

Petitioner,

vs. Case No. 1 4 - 4147 PL

LINDA FIORELLO ,

Respondent.

_______________________________/

DEPART MENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF REAL ESTATE ,

Petitioner,

vs. Case No. 1 4 - 4148PL

CATHERINE A. LICHTMAN ,

Respondent.

_______________________________/

RECOMMENDED ORDER

On February 2 4 and 25 , 201 5 , a duly - not iced hearing was

held by video teleconference at locations in Lauderdale Lakes

and Tallahassee , Florida , before F. Scott Boyd, an

Administrative Law Judge assigned by the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Joshua N. K endrick , Esquire

Whitney Rebecca Hays, Esquire

Crystal D. Stephens, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street , Suite 25A

Tallahassee, Florida 323 99

For Respondent , Linda Fiorello :

Daniel Villazon , Esquire

Daniel Villazon, P.A.

5278 Major Boulevard , Suite 535

Orlando , Florida 328 19

For Respondent , C atherine A. L ichtman :

Robert B rian Resnick , Esquire

Law Office of Robert B. Resnick

Post Office Box 1872

Boca Raton , Florida 33429

STATEME NT OF THE ISSUE S

Whether either Respondent violated the provisions of

chapter 475, Florida Statutes, 1/ regulating real estate sales

associates, as alleged in the administrative complaints, and if

so, what sanction s are appropriate .

PRELIMINARY STATEMENT

On March 17, 2014 , Petitioner, Department of Professional

Regulation, Division of Real Estate (Petitioner or Department) ,

filed an Administrati ve Complaint against M s . Linda Fiorello,

alleging that M s. Fiorello had violated several sections of

chapter 475 in connection with a n offer to purchase real

property at 10861 Royal Palm Boulevard in Coral Springs , Florida

(Ðthe propertyÑ) . On March 17, 2014, the Department also filed

an Administrative Complaint against Ms. Catherine A. Lichtman ,

alleging violation s of chapter 475 stemming from the same offer .

Each sales associate disputed the allegations and requested a

hearing pursuant to section 120.57(1), Florida Statutes. On

September 5 , 201 4 , the cases w ere referred to the Division of

Administrative Hearings for assignment of an a dministrative law

judge. The case s were consolidated on Septemb er 17 , 2015 , and ,

after continuance, the final hearing was conducted on

February 24 and 25 , 2015.

At hearing, the Department presented the live testimony of

M s . Jennifer North, an Investigation Supervisor with the

Department; Ms. Jennie Pollio, a renter and prospective

purchaser of the property; and Mr. Brian Davis, the real estate

b roker for Luxury Realty Partners, Inc. Exhibits P - 1 through

P - 14 were offered by the Dep artment and admitted into evidence.

Ms. Fiorello testified and presented the testimony of

Ms. Victoria Guante an d Ms. Patty Ashford, both real estate

sales associate s at Luxury Realty Partners, Inc. Ms. Fiorello

offered Ex hibit F - 1, which was admitted. Ms. Lichtman testified

and offered exhibits L - 1 , L - 2, L - 4 , L - 6 through L - 15, L - 21,

L - 23, L - 27, and L - 29, which were admitted into evidence.

The two - volume T ranscript was filed o n April 21, 2015 . On

May 19, 2015, Ms. Lichtman filed a Motion to Correct Transcript

and Extend or Stay Date for Service of Proposed Order. On the

same date, the Department filed a motion in opposition. The

motion to extend the time for filing proposed orders was den i ed.

The motion to correct the Transcript was granted. An a mended

Transcript o f Proceedings and a Transcript E rrata Sheet were

filed on June 5 , 2015 . All parties filed P roposed R ecommended

O rders , which were carefully c onsidered.

FINDINGS OF FACT

1. The Florida Real Estate Commission, created within the

Departm ent , is the entit y charged with regulating real estate

brokers, schools, and sales asso ciates in the State of Florida .

2. The Division of Real Estate is charged with providing

all services to the commission under chapters 475 and 455,

Florida Statutes, in cluding recordkeeping services, examination

services, investigative services, and legal services.

3 . In 2006, M s . L inda Fiorello and Ms. Catherine Lichtman ,

associates at another brokerage, decided to open up their own

real estate bus iness, with each owni ng a fifty - percent share.

The y created Luxury Realty Partners, Inc . ( Ð the co rporationÑ ) , a

licensed real estate corporation in the State of Florida . While

Ms. Lichtman was initially the qualifying broker, she soon

stepped down from that position and a se ries of other

individuals served as brokers for the corporation . Neither

Ms. Fiorello nor Ms. Lichtman was licensed as a real estate

broker at any time relevant to the Administrative Complaints .

The corporation sold, exchanged , or leased real property ot her

than property which it owned and it was not an owner - developer.

4. On April 23, 2010 , Mr. Brian Davis was added as the

sole officer and director of the corporation, and he became the

qualifying broker. At all times material to the complaints,

Ms. F iorello and Ms. L ichtman were licensed as real estate sales

associate s in the State of Florida , Ms. Fiorello having been

issued license number 659087 and Ms. Lichtman having been issued

license number 3170761. They worked together at the

corporation , nomi nally under the direction, control, and

management of Mr. Davis.

5. The corporation did not maintain an escrow account.

Mr. Davis did not manage any of the corporation Ós bank accounts.

He was not a signatory on the operating account. He did not

coll ect brokerage commissions or distribute them to sales

associates. He testified he went into the office Ðmaybe once,

once or twice a month.Ñ When he agreed to become the qualifying

broker for the corporation , he did not even know all of the

names of the a gents he was supposed to be responsible for.

Mr. Davis stated :

Well, basically, I was just doing a favor

and I was Î I put my license there until one

of the other two could get their BrokerÓs

license. I was just really stepping in for

a short term to Î to fill the time frame

until one of them could get their Brokerage

l icense, and I didnÓt go on any management

or any other books or anything of that

nature.

6 . As Ms. Patty Ashford, one of the sales associates

testified, Mr. Davis was seldom in the offic e . Ms. Ashford

would turn in her contracts to Ms. Fiorello or Ms. Lichtman, who

would review them. Ms. Ashford testified that her commission

checks were then paid by checks signed by Ms. Lichtman. In

short, Mr. Davis effectively provided no direction, c ontrol , or

management of the activities of the corporation or its sales

associates .

7 . In December of 2009, Ms. Jennie Pollio was living at

10861 Royal Palm Boulevard in Coral Springs, Florida (the

property) , a Section 8 property t hat she had been rentin g from

Mr. Jimmy Laventur e for about nine years. The property was in

foreclosure . Ms. Pollio thought that she might be able to buy

the property. S he consulted Ms. Victoria Guante, a real estate

sales associate with Luxury Realty Partners, Inc. Ms. Poll io

knew Ms. Guante because they both had sons who played baseball

on the same team. Ms. Guante told Ms. Pollio to get $40,000.00

in cashierÓs checks and put it in escrow with Luxury Real ty

Partners , Inc. , so that s he could make a strong offer and show

tha t she really had the money .

8 . Although they were not produced as exhibits at hearing,

Ms. Pollio testified that she signed a couple of differe n t

contracts for the property in early 2010 . On or about April 29,

2010, Ms. Guante accompanied Ms. Pollio to the bank to get

cashierÓs checks. Ms. Pollio received five Bank of America

cashierÓs checks made out to ÐLuxury Partner Realty,Ñ four in

the amount of $9000.00, and one in the amoun t of $4000.00.

Ms. Pollio understood that the property could be purchased for a

total of $40,000. 00, which included $37,000. 00 for the property ,

a nd the balance in closing costs.

9. The cashierÓs checks were not given to a broker .

Ms. Pollio gave the $40,000.00 to Ms. Fiorello as a deposit on

the property when she met with her in the corporation office on

State Road 7 . Ms. Pollio made a copy of the cashierÓs checks

and Ms. Fiorello wrote a note on the bottom of the copy ,

ÐReceived by Linda A. Fiorello for Luxury Escrow deposit on

contract 10861 Royal Palm Blvd Coral Springs FL 33065Ñ and gave

it back to Ms. Pollio. 2 / Although the payee name on the

cashierÓs checks was transposed, Ms. Pollio gave the checks to

Ms. Fiorello as agent of the corporation as a deposit on the

property, and Ms. Fiorello accepted the checks on behal f of the

corporation for the same purpose.

10 . Ms. Fiorello did not advise Mr. Davis that the checks

had been received. Instead, s he deposited the checks in an

account formerly belonging to Luxury Property Management, an

entity unaffiliated with Luxury Realty Partners, Inc. 3 / Luxury

Property Management had never been a licensed real estate

brokerage corporation , and was no longer in existence, as it had

been dissolved. T he account had never been properly closed .

The account usually had a low balance. Just prior to the

deposit of Ms. PollioÓs money, the balance was $10,415.15.

11 . Ms. Lichtman had no ownership or interest in Luxury

Property Management , but she was aware of the account. The

corporation did not have an escrow account, and the L uxury

Property Management account was sometimes used to hold money Ðin

escrow , Ñ as Ms. Lichtman was aware. As he testified, Mr. Davis

knew nothing about this account and did not authorize

Ms. Fiorello to place Ms. PollioÓs deposit there .

Ms. FiorelloÓs contra ry testimony that she told Mr. Davis of the

transaction and had his authorization wa s not credible and is

rejected.

12 . Ms. Guante was negotiating for the property on

Ms. PollioÓs behalf . She testified:

At that point the guy was asking

(unintelligible) I think was sixty - five, and

then we made the offer for $40,000. 00. The

guy came back and say Ðno , Ñ and the n we went

back and make another offer for $50,000.00 ,

and then by that time the guy still say

Ðno.Ñ And then her and I get into an argue

because base ball game that donÓt have

nothing to do with the real estate and then

she decided she donÓt want me no more as her

agent.

13 . Ms. Guante called Ms. Fiorello and told her that

Ms. Pollio didnÓt want to work with Ms. Guante anymore.

Ms. Fiorello told Ms. Guante not to worry about it, that the

corporation would handle the transaction for Ms. Pollio.

14 . On September 23, 2010, a check in the amount of

$40,000.00 was written from the Luxury Property Management, LLC,

account to Luxury Realty Partners . It i s undisputed that the

hand writing on the Ð amount Ñ and Ðpay to the order ofÑ lines on

the check was that of Ms. Lichtman, while the signature on the

check was that of Ms. Fiorello. This check, posted into the

corporationÓs operating account the same day, along with a check

for $6000.00, left a balance of only $684.15 in the Luxury

Property Management, LLC, account.

15 . The two sales associates gave completely different

explanations for th e check . Ms. Fiorello testified that she

always left one or two si gned checks locked in the office when

she was out of town. She testified that only she and

Ms. Lichtman had keys to the lock. Ms. Fiorello testified that

without her knowledge , Ms. Lichtman had removed a signed check

and filled in the top portion . She t estified that although it

was her account , she did not realize that the money had been

removed until around May 2011, some eight months later . 4 /

16 . On the other hand, Ms. Lichtman testified that on

numerous occasions, the two associates would write out checks

together, and that in this instance they discussed the transfer

in connection with the opening of a Rapid Realty real estate

office in New York which involved Ms. FiorelloÓs son .

Ms. Lichtman testified that she filled out the top portions of

the c heck, and Ms. Fiorello then signed it. Ms. Lichtman

testified that the $40,000.00 Ðrepresented monies coming back

into Luxury Realty Partners from Rapid Realty.Ñ Ms. Lichtman

did not explain why funds from Rapid Realty to repay a loan from

Luxury Realty Partners would have been deposited in to the Luxury

Property Management account , and records for the Luxury Property

Management account do not reflect such deposits.

17 . On November 4, 2010, a little over a month later,

Ms. Lichtman transferred $40,000.00 from the corporation

operating account into an account for Chatty Cathy Enterprises,

an account controlled by her, and inaccessible to Ms. Fiorello.

18 . Ms. LichtmanÓs explanation for these transfers, that

the $40,000 .00 came from the New York real esta te venture in

repayment of a loan made from the corporation , was unpersuasive,

and is rejected. First, the only documentary evidence of a loan

made to the Ðstart - upÑ was an unsigned half - page note dated

April 30, 2010 . That document indicated that an int erest - free

business loan in the amount of 25,000 would be made from the

corporation to ÐRapid Realty RVC and its ownersÑ and that re -

payment of the loan would be made in monthly payments to the

corporation . No amount was specified for these payments.

Sim ilarly, t here was no evidence of any repayment checks from

Rapid Realty to Ms. Fiorello , Ms. Lichtman, or the corporation .

1 9. A document dated November 5, 2010, purports to be a

Ðformal releaseÑ of th at loan. It states in part:

The above stated note l ists a dollar amount

of $25,000 dollars which is inaccurate. T he

total balance of the loan was approximately

$48,000 dollars that was loaned by Luxury

Partners Realty (sic), Catherine A. Lichtman

and Linda A. Fiorello. This is the formal

dollar amount of the loan that is considered

paid and satisfied in full.

This release appears to be signed by Ms. Lichtman and

Ms. Fiorello. Even assuming that the loan ha d been repaid in

full by the New York venture (although no corporation account

deposits indicate th is), it is not credible that Ms. Lichtman

believed she was personally entitled to a payment of $40,000 .00

for repayment of a $48,000 .00 loan made by the corporation . The

spreadsheet of itemized expenses of the New York office and

offered by Ms. Lichtman a s proof of amounts loaned has no

apparent correlation to a spreadsheet prepared by Ms. Lichtman

purporting to show checks and cash amounts transferred to New

York. 5 /

20 . In January 2011, Ms. Teresa Ebech, the listing agent

for the property with First U nited Realty , took another contract

for the Royal Palm property to Ms. Pollio. This contract

referenced a $40,000. 00 deposit and listed ÐLuxury Property Mgt.

EscrowÑ as the escrow . This contract indicated a total purchase

price o f $55,000. 00 , and called for a February 21, 2011, closing

date. Ms. Pollio signed the contact.

21 . The closing did not occur. Ms. Pollio decided to stop

trying to buy the property and get her money back. No other

party ever acquired an interest or equity in the deposit .

Ms. P ollio had difficulty getting in touch with Ms. Fiorello

about ge tting her money back . When Ms. Pollio finally was able

to ask Ms. Fiorello for a return of her deposit, Ms. Fiorello

did not return it, but told Ms. Pollio that she should get it

from Ms. Lic htman.

22 . On or about April 28, 2011, Ms. Pollio, with help from

her friend, Ms. Joyc e Watson, prepared a letter to cancel the

contract. The letter noted that the $40,000.00 had been in

escrow for over a year and stated that d ue to the inability of

Lu xury Realty Partners to close on the property, Ms. Pollio

requested immediate return of the deposit. The letter was sent

to Catherine Lichtman at the Luxury Realty Partners, Inc. ,

address . Ms. LichtmanÓs testimony that she never received the

letter is di scredite d.

23 . Ms. Ashford , another real estate sales associate at

the corporation , had never met Ms. Pollio, but was in the Luxury

Realty Partners, Inc. , office one day in May of 2011 when

Ms. Pollio came in with her husband . Ms. Ashford testified:

She came in with her husband pretty much

screaming and yelling from the minute she

stepped foot in the door. She was very

angry, very upset. I looked at her and

said, you know, MaÓam please calm down. She

said IÓm not calming down. She pointed at

Cathy, sh e said she knows exactly why IÓm

fÓin here. This has nothing to do with you.

24 . Ms. Lic h tman asked Ms. Ashford to call her husband,

which Ms. Ashford did, thinking this was unusual because he

never had anything to do with what went on at the office.

25 . Ms. Pollio yelled at Ms. Lichtman , and Ms. Lichtman

yelled back, each becoming more and more agitated. Ms. Lichtman

then left the room and locked the door. The police were called,

though Ms. Ashford was not sure if it was Ms. Pollio or her

husband, or perhaps Ms. LichtmanÓs husband, who called them.

Ms. Ashford testified that w hen the police officer arrived,

Ms. Lichtman lied and told him that her name was Victoria. The

officer tried to calm both parties, and told them it was a civil

matter. The p olice officer finally persuaded Ms. Pollio and her

husband to leave.

26 . Ms. Ashford testified as follows about the

conversation that took place between Ms. Lichtman and

Ms. Ashford after Ms. Pollio left:

Q What did you say?

A I asked her point blank w hat the hell was

going on and she responded.

Q What did she respond?

A That yes, she had her money. T he money

was - Î

Q When you said her money. What - Î what are

talking about?

A She had JennieÓs money.

Q She --

A It was a deal, a transaction. ÐSh e came

into our office with cash coming out of her

boobs and I donÓt have to give it back.Ñ

Were her words.

Q Did you tell Cathy that she had to return

the money?

A Yes, I did. I said ÐCathy, its escrow

money, it doesnÓt matter where she got it

from ,Ñ and Cathy went on about ÐitÓs illegal

sheÓs a dancer, sheÓs on Section 8. IÓm

going to report it to the IRS. She thinks

she buying a fÓin house.Ñ

Ms. LichtmanÓs admission to Ms. Ashford after Ms. Pollio left

showed that Ms. Lichtman knew that she had money in her

possession that had been given by Ms. Pollio to buy a house .

27 . Ms. Ashford testified that she was upset, as an agent

with the corporation , about what appeared to be going on. She

and Ms. Fiorello met with Mr. Davis in A pril of 2011.

Ms . Fiorello told Mr. Davis that Ms. Lichtman had stolen funds.

Mr. Davis reviewed the January contract that Ms. Fiorello gave

him, and concluded that it didnÓt make much sense. He had not

given any authorization to place escrow funds into the Luxury

Prope rty Management, LLC , account. He did not have access to

that account or to any of the corporation Ós operating accounts

to determine if money was missing.

28 . After the meeting , Mr. Davis asked Ms. L ichtman what

she knew about the accusation. Ms. Licht man denied that she

took any money from an escrow account. Mr. Davis called the

Florida Real Estate Commission and reported the incident.

2 9. At some point, Ms. Lichtman advised Ms. Pollio that

the cancellation letter was n ot sufficient, and provide d

Ms. Pollio with a ÐRelease and Cancellation of Contract for Sale

and PurchaseÑ form. Mr. Laventura signed the form in June 2011,

and Ms. Pollio signed the f orm when she returned it to

Ms. Lichtman at the Luxury Realty Partners, Inc. , office. The

form r eleased Luxury Partner Realty from liability and indicated

that the escrow agent should disburse all of the $40,000.00

deposit to Ms. Pollio. At the time of the final hearing,

Ms. Pollio had yet to receive her $40,000.00 deposit back.

30 . The testimony a nd documentary evidence in this case

clearly demonstrates a recurring and systematic disregard of the

legal entities and procedures intended to provide structure and

accountability to business and real estate transactions by both

Ms. Fiorello and Ms. Licht man.

31 . Ms. Fiorello and Ms. Lichtman employed a qualifying

ÐbrokerÑ for the corporation , but intentionally assum ed th e

responsibilities of that position themselves during the time

relevant to the Administrative Complaints. In doing so, they

each opera te d as a broker without being the holder of a valid

and current active brokersÓ license .

32 . No evidence was introduced at hearing to indicate that

the professional license of either Ms. Fiorello or Ms. Lichtman

ha s ever been previously subjected to disci pline.

CONCLUSIONS OF LAW

33 . The Division of Administrative Hearings has

jurisdiction over the subject ma tter and the parties to this

proceeding in accordance with sections 120.569 , and 120.57(1),

Florida Statutes (201 4 ) .

34 . Petitioner seeks to ta ke disciplinary action against

the real estate sales associate licenses of Respondent s. A

proceeding to impose d isciplin e against a professional license

is penal in nature , and Petitioner bears the burden to pro ve t he

allegations in the a dministrative c om plaint s by clear and

convincing evidence. Dep ' t of Banking & Fin. v. Osborne Stern &

Co. , 670 S o. 2d 932 (Fla. 1996); Ferris v. Turlington , 510 So.

2d 292 (Fla. 1987).

35 . Clear and convincing evidence has been said to

require:

[T]hat the evidence must b e 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

t ruth 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)).

36 . Disciplinary statutes and rules "must always be

construed strictly in favor of the one against whom the penalty

would be imposed and are never to be extended by construction."

Griffis v. Fish & Wildlife Conserv. Comm'n , 57 So. 3d 929, 931

(Fla. 1st DCA 2011) . Any ambiguities must be construed in favor

of the licensee. Le ster v. DepÓt of Prof'l Reg. , 348 So. 2d 923,

925 (Fla. 1st DCA 1977) .

Counts Filed Against R espondent Fiorello

C ount I

37 . Section 475.25(1)(k) provide d , in releva nt part, that

discipline may be imposed if the commission finds that a sales

associate has failed :

to immediately place with her or his

registered emplo yer any money, fund,

deposit, check, or draft entrusted to her or

him by any person dealing with her or him as

agent of the registered employer.

38 . In support of Count I, Petitioner clearly showed that

Ms. Pollio entrusted her deposit money to Respondent Fiorello as

an agent of Luxury Realty Partners, Inc. Respondent Fiorello

did not immediately place that money with her registered

emplo yer , but instead deposited it in an account belonging to a

dissolved entit y she had once owned , completely unaffiliated

with the corporation , and unknown to Mr. Davis .

3 9 . Petitioner proved by clear and convincing evi dence

that Respondent Fior ello violated section 475.25(1)(k) .

C ount II

40 . Section 475.25(1)( d ) provide d , in relevant part, that

discipline may be imposed if the commission finds that a sales

associate :

Has failed to account or deliver to any

person, incl uding a licensee under this

chapter, at the time which has been agreed

upon or is required by law or, in the

absence of a fixed time, upon demand of the

person entitled to such accounting and

delivery, any personal property such as

money, fund, deposit, ch eck, draft, abstract

of title, mortgage, conveyance, lease, or

other document or thing of value . . . .

41 . In support of Count I I , Petition er showed that when

Ms. Pollio, a person entitled to return of her $ 40,000.00 ,

requested return of her deposit , Re spondent Fiorello failed to

return it to her .

42 . Petitioner proved by clear and convincing evidence

that Respondent Fiorello violated section 475.25(1)(d) .

Count III

43 . Section 475. 42 (1)( d ) provide d , in relevant part:

A sales associate may not collec t any money

in connection with any real estate brokerage

transaction, whether as a commission,

deposit, payment, rental, or otherwise,

except in the name of the employer and with

the express consent of the employer . . . .

44 . In support of Count II I , t he evidence clearly showed

that Respondent Fiorello collected the deposit that Ms. Pollio

gave to her for the purchase of property without the express

consent of the qualifying broker or the corporation .

45 . Petitioner proved by clear and convincing evi de nce

that Respondent Fiorello violated section 475. 42 (1)(d) , and so

section 475.25(1)(a), which provides that any violation of

section 475.42, containing criminal provisions, also constitutes

an administrative discipline offense .

Count IV

46 . Section 475 . 42 (1)( a ) provide d , in relevant part :

A person may not operate as a broker or

sales associate without being the holder of

a valid and current active license therefor.

Any person who violates this paragraph

commits a felony of the third degree,

punishable as provided in s. 775.082 or

s. 775.083 , or, if a corporation, as

provided in s. 775.083 .

47 . Section 475.01(1)(a) include d within the defin ition of

ÐbrokerÑ a person who with an intent to collect or receive

compensation or valuable consideration therefor, attempts or

agrees to negotiate the purchase of real property or who holds

o ut to the public by any representation that she is engaged in

the business of buying real property of others , or takes any

part in the procuring of sellers , or who directs or assists in

the negotiation or closing of any transaction which is

calculated to r esult in a sale thereof, and who receives,

expects, or is promised any compensation or valuable

consideration, directly or indirectly therefor .

48 . Section 475.01(1) (j) provide d that a Ðsales associateÑ

is a person who performs any act specified in the d efinition of

Ðbroker,Ñ but who performs such act under the direction,

control, or management of another person.

4 9. As charged in the Administrative Complaint, in

accepting Ms. PollioÓs deposit for the purchase of the property

on behalf of the corporati on , Respondent Fiorello performed

actions specified within the definition of Ðbroker.Ñ The only

qualifying broker, Mr. Davis, provided no direction, control , or

management of these activities, or any of her activities, as

Respondent Fiorello well knew. R espondent Fiorello operated as

a broker without being the holder of a valid and current active

brokerÓs license.

50 . Petitioner proved by clear and convincing evidence

that Respondent Fiorello violated section 475. 42 (1)( a ), and so

section 475.25(1)(a), which provides that violation of the

criminal provision is also a basis for administrative

discipline.

Count V

51 . Section 475.25(1)( b ) provide d , in relevant part, that

discipline ma y be imposed if the commission finds that a

licensee :

Has been guilty of fraud, misrepresentation,

concealment, false promises, false

pretenses, dishonest dealing by trick,

scheme, or device, culpable negligence, or

breach of trust in any business transaction

in this state or any other state, nation, or

territory; has violated a duty imposed upon

her or him by law or by the terms of a

listing contract, written, oral, express, or

implied, in a real estate transaction; has

aided, assisted, or conspired with any other

person engaged in any such misconduct and in

furtherance thereof ; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme.

52 . A violation of section 475.25(1)(b) require s a finding

of wrongful intent or scienter . Morr i s v. Dep't of Prof'l Reg. ,

474 So. 2d 841, 843 (Fla. 5th DCA 1985) . See , e.g. , Whi te v.

DepÓt of Bus. & Prof'l Reg. , 715 So. 2d 1130, 1130 (Fla. 5th DCA

1998) (violation of section 475.25(1)(b) shown where broker did

not place deposit in escrow, used it f or personal benefit, and

did not return it to buyer when transaction failed to close).

While s imple negligence is not sufficient , Ðculpable negligenceÑ

does constitute a violation.

53 . For negligence to rise to th e ÐculpableÑ level, it

must be gross and flagrant. The negligence must be committed

with an utter disregard for the safety of others . Culpable

negligence is consciously doing an act or following a course of

conduct that a r espondent must have known, or reasonably should

have known, was likely t o cause great injury, and must be

determined "upon the facts and the totality of the circumstances

in each particular case." Cf . Kish v. State , 145 So. 3d 225,

227 - 28 (Fla. 1st DCA 2014) (citing Fl a. Std. Jury Instr. (Crim.)

16.6 ).

54 . In support of Coun t V, Petitioner established by clear

and convincing evidence that Ms. Fiorello was culpably negligent

and breached the trust of Ms. Pollio . Respondent Fiorello

admitted that she knowingly plac ed Ms. PollioÓs $40,000.00 in an

account of a n entity that had never been a licensed real estate

brokerage corporation, that had a bsolutely no affiliation with

the corporation , that Respondent Fiorello had solely owned, and

that in fact was no longer in existence because it had been

dissolved. Although Respondent Fio rello knew the entity was no

longer in existence, she never closed the bank account, but

continued to use it. Respondent Fiorello provid ed Ms. Pollio

with an undated Ðescrow verificationÑ that did not mention the

corporation , failed to provide even minim a l monitoring of the

ÐescrowÑ account to ensure the safety of the funds , and later

intentionally or negligently allowed the funds to be transferred

into an operating account . In short, Respondent Fiorello showed

utter disregard for the safe ty of Ms. Pollio Ós money and h ad to

have known that her course of conduct was likely to cause great

injury to Ms. Pollio. If Respondent Fiorello did not have an

actual intent to defraud Ms. Pollio from the beginning, she

certainly showed a wanton or reckless indifference to

Ms. PollioÓs rights, which was equivalent to an intentional

violation of them. Cf . Ibeagwa v. State , 141 So. 3d 246, 250

(Fla. 1st DCA 2014) . Ms . Pollio, who admitted she was not

sophisticated in real estate transactions, trusted in Respondent

Fiorel lo to guide her and safeguard her deposit in a real estate

transaction . That trust was breached.

55 . Petitioner proved by clear an d convincing evidence

that Respondent Fiorello violated section 475.25(1)( b ) .

Counts Filed Against R espondent Lichtman

Count I

56 . S ection 475.25(1)( b ) , Florida Statutes (2010),

provide d , in relevant part, that discipline ma y be imposed if

the commission finds that a licensee :

Has been guilty of fraud, misrepresentation,

concealment, false promises, false

pretenses, dishonest dealing by trick,

scheme, or device, culpable negligence, or

breach of trust in any business transaction

in this state or any other state, nation, or

territory; has violated a duty imposed upon

her or him by law or by the terms of a

listing contract, writt en, oral, express, or

implied, in a real estate transaction; has

aided, assisted, or conspired with any other

person engaged in any such misconduct and in

furtherance thereof; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme.

57 . In Count I of the Administrative Complaint , Petitioner

alleged that Respondent Lichtman violated this statute when she

transferred the $40,000.00 escrow deposit from the corpo ration

operating account into the Chatty Cathy Enterprises account.

58 . Ms. Pollio , having had five years to consider the

matter while waiting for the return of her $40,000 , is convinced

t hat Respondents were working together to defraud her : Ðthey

scamm ed me , Ñ Ðthese two ladies in cahoots robbed my money . Ñ She

may be right. T he two associates may well have been working

together when Respondent Lichtman filled out the check from the

Luxury Property Management account and Respondent Lichtman may

have bee n fully aware that the money was Ms. PollioÓs deposit.

If so, she was still aware at the time she transferred the money

into Chatty Cathy Enterprises . There may have been a conspiracy

to defraud Ms. Pollio that was only abandoned when Respondents

later h ad a falling out as business partners . But none of this

was clearly and convincingly shown.

5 9. Specifically as to this count , it was not shown that

at the time Respondent Lichtman made the transfer into the

Chatty Cathy Enterprise s account she knew that it was

Ms. PollioÓs deposit money. While i t was clear from Respondent

LichtmanÓs admissions to Ms. Ashford that she acknowledged this

by the time Ms. Pollio visited her at the office in May , it is

not clear if she knew this from the beginning, or , if not , when

she learned it.

60 . What Respondent Lichtman knew at the time of the

transfer from the corporation operating account is important

because section 475.25(1)(b) requires proof of an intentional

act . Munch v. Dep't of Prof'l Reg. , 592 So. 2d 1136, 11 43 (Fla.

1st DCA 1992) . Petitioner failed to show that at the time

Respondent Lichtman made the transfer from the corporation

operating account into the Chatty Cathy Enterprises account that

either: 1) Respondent Lichtman was conspiring with Respondent

F iorello; or 2) she otherwise knew the money belonged to

Ms. Pollio.

61 . Petitioner failed to prove by clear and convincing

evidence that Respondent Lichtman violated section 475.25(1)(b) .

C ount II

62 . Section 475.25(1)( d ) , Florida Statutes (2010) ,

provi de d , in relevant part, that discipline may be imposed if

the commission finds that a sales associate :

Has failed to account or deliver to any

person, including a licensee under this

chapter, at the time which has been agreed

upon or is required by law or, in the

absence of a fixed time, upon demand of the

person entitled to such accounting and

delivery, any personal property such as

money, fund, deposit, check, draft, abstract

of title, mortgage, conveyance, lease, or

other document or thing of value includ ing a

share of a real estate commission if a civil

judgment relating to the practice of the

licenseeÓs profession has been obtained

against the licensee and said judgment has

not been satisfied in accordance with the

terms of the judgment within a reasonab le

time, or any secret or illegal profit, or

any divisible share or portion thereof,

which has come into the licenseeÓs hands and

which is not the licenseeÓs property or

which the licensee is not in law or equity

entitled to retain under the circumstances.

63 . C lear and convincing evidence showed that by the time

of Ms. PollioÓs verbal demand upon Respondent Lichtman to return

her deposit , and at the time of Ms. PollioÓs submission of the

R elease and C ancellation of C ontract for S ale and P urchase form

to Respondent Lichtman , Respondent Lichtman knew that she had

Ms. PollioÓs deposit money. Respondent Lichtman acknowledged

that the $40,000 .00 that c a me into her hands as a result of her

transfer from the corporation account was not her property and

that sh e was not entitled to retain it in law or equity under

the circumstances. Immediately after Ms. PollioÓs police -

assisted departure from the corporation office following her

earsplitting verbal demand s for return of her deposit,

Respondent Lichtman admitte d to Ms. Ashford that she was in

possession of money that Ms. Pollio had given for purchase of a

house. Respondent Lichtman also knew this later , when she

received the R elease and C ancellation of C ontract for S ale and

P urchase form . Petitioner never prov ed whether s he kn ew it from

the outset, as suspected by Ms. Pollio , or if she only learned

it later , in some other way, such as examination of the various

accounts to which she had access . However, P etitionerÓs p roof

that Respondent knew that the funds in her possession belonged

to Ms. Pollio at the time of Ms. PollioÓs demands was

sufficient. Once Respondent Lichtman acknowledged that the

funds belonged to Ms. Pollio and she was not entitled to retain

them, she was legally obligated to deliver them to Ms . Pollio.

It is undisputed that she did not do so.

64 . Respondent LichtmanÓs argument that Ðmoney is

fungibleÑ is disingenuous under all of the circumstances here .

It rings hollow in the face of Respondent LichtmanÓs earlier

acknowledgment that she was in possession of Ms. PollioÓs

deposit money. While it is clear that escrow rules were not

followed , that misconduct provide s no defense to Respondent

Lichtman. She was aware that the Luxury Property Management

account was sometimes improperly used to hol d escrow funds. The

customary low balance in that fund, followed in succession by

the deposit of Ms. PollioÓs $40,000 .00 , the movement of the sum

of $40,000 .00 to the corporation operating account, and finally

the movement of the sum of $40,000.00 to the Chatty Cathy

Enterprises account, is telling. Under all of the

circumstances, it is abundantly clear to any reasonable observer

that the funds that ultimately were deposited into the Chatty

Cathy Enterprises account rightfully belonged to Ms. Pollio,

just as Respondent Lichtman herself a dmitted .

65 . Petitioner showed that Respondent Lichtman failed to

account or deliver $40,000.00 to Ms. Pollio , a person entitled

to such delivery, upon her May verbal demand and upon her June

submission of the R elease and C ancellation of C ontract for S ale

and P urchase form .

66 . Petitioner proved by clear and convincing evidence

that Respondent Lichtman violated section 475.25(1)(d) .

Count III

67 . Section 475. 42 (1)( d ) , Florida Statutes (2010),

provide d , in relevant part:

A sales associate may not collect any money

in connection with any real estate brokerage

transaction, whether as a commission,

deposit, payment, rental, or otherwise,

except in the name of the employer and with

the express consent o f the employer . . . .

68 . In support of Count II I , Petition er argues in its

P roposed R ecommended O rder that evidence at hearing clearly

showed that on more than one occasion Respondent Lichtman

directly compensated herself, and other sales associates, for

real estate transact ions conducted through the corporation

without involving her broker . Th ese facts might well show a

violation of section 475.42(1)(d), and even more clearly a

violation of s ection 475. 42 (1)( a ) , which prohibits a person from

acting as a broker without a cur rent license , but t h ese were not

the facts alleged in Count III of the Administrative Complaint

to constitut e the violation . Cottrill v. DepÓt of Ins. , 685 So.

2d 1371, 1372 (Fla. 1st DCA 1996) (disciplinary action against a

licensee can only be based upo n the conduct alleged in the

administrative complaint).

6 9. Count III instead al leged that Respondent Lichtman

compensated herself with ComplainantÓs $40,000.00 escrow

deposit. It is clear that Respondent Lichtman withdrew money

from the corporation ope rating account and put it into an

account belonging to Chatty Cathy Enterprises, an account she

wholly controlled. She admitted at hearing that the transfer

was intended to compensate her personally. The first , and

dispositive, question is whether th at t ransfer constitute d a

ÐcollectionÑ of money within the meaning of the statute. Given

that penal statutes must be strictly construed , the answer must

be Ðno.Ñ

70 . It is clear from the text of section 475.42(1)(d) that

the ÐcollectionsÑ that may not be u ndertaken , except in the name

of the employer and with the employerÓs consent , are things such

as deposits, commission s , rents, or other collections made in

connection with a real estate brokerage transaction. While the

evidence showed that th e $40,000.00 had been earlier ÐcollectedÑ

by Respondent Fiorello from Ms. Pollio in connection with a real

estate transaction, it was not ÐcollectedÑ again within the

meaning of the statute when Respondent Lichtman transferred the

money to Chatty Cathy Enterprises . T he November 4, 2010,

transfer was not a collect ion of money in connection with a real

estate brokerage transaction .

71 . Petitioner failed to prove by clear and convincing

evidence that Respondent Lichtman violated section 475.42(1)(d) .

Penalties

72 . Sec tion 475.25(1)( a ) provide d that discipline may be

imposed if the commission finds that a sales associate has

violated any provision of section 475.42.

73 . Section 475.25(1) set forth possible penalties which

may be imposed by the commission for each off ense , including :

reprimand; probation; administrative fine up to $5000;

suspension up to 10 years; and revocation .

74 . Section 455.2273 , Florida Statutes, provide d that each

board, or the department when there is no board, shall adopt

d isciplinary guidel ines applicable to each ground for

disciplinary action which may be imposed pursuant to a practice

act.

75 . From December 25, 2007, until July 20, 2010, Florida

Administrative Code Rule 61J2 - 24.001(3)( l ) provide d that for a

viol ation of section 475.25(1 )(k), the usual action of the

Commission shall be to impose a n administrative fine not to

exceed $5000 and a 9 0 - day suspension to revocation.

76 . From July 21, 2010, until November 14, 2012, Florida

Administrative Code Rule 61J2 - 24.001(3) (e) provide d tha t for a

first violation of section 475. 25 (1)( d ), the usual action of the

Commission shall be to impose a $250 to $ 1000 administrative

fine and suspension to revocation .

77 . From December 25, 2007, until July 20, 2010, Florida

Administrative Code Rule 61J2 - 24.001(3) (bb) provide d that for a

violation of section 475. 42 (1)( d ), the usual action of the

Commission shall be to impose an administrative fine not to

exceed $5,000 and up to a 3 - year suspension .

78 . From December 25, 2007, until July 20, 2010, Florid a

Administrative Code Rule 61J2 - 24.001(3) ( y ) provide d that for a

violation of section 475. 42 (1)( a ), the usual action of the

Commission shall be to impose an administrative fine not to

exceed $5,000 and a 3 - year suspension to revocati on .

7 9. From December 25, 2007, until July 20, 2010, Florida

Administrative Code Rule 61J2 - 24.001(3) ( c ) provide d that for an

act of culpable negligence and breach of trust in violation of

section 475. 25 (1)( b ), the usual action of the Commission shall

be to impose an administra tive fine not to exceed $5,000 and a

one - year suspension.

80 . Rule 61J2 - 24.001(4 )( b ) 6 / provide d :

( b) Aggravating or mitigating circumstances

may include, but are not limited to, the

following:

1. The degree of harm to the consumer or

public.

2. The n umber of counts in the

Administrative Complaint.

3. The disciplinary history of the

licensee.

4. The status of the licensee at the time

the offense was committed.

5. The degree of financial hardship

incurred by a licensee as a result of the

impositio n of a fine or suspension of the

license.

6. Violation of the provision of Chapter

475, F.S., wherein a letter of guidance as

provided in Section 455.225(4), F.S.,

previous ly has been issued to the licensee.

81 . N o aggravating or mitigating circumstanc es are present

here with respect to either Respondent to the extent necessary

to warrant deviation from the wide range of penalties already

permitted within the guidelines.

82 . Section 455.227 ( 3)(a) provides that i n addition to any

other discipline imposed , costs related to the investigation and

prosecution of the case may be assessed.

RECOMMENDATION

Upon conside ration of the foregoing Findings of Fact and

Conclusions of Law, it is RECOMMENDED that f inal order s be

entered by t he Florida Real Estate Commission :

F indin g Linda Fiorello i n violation of section s

475.25(1)(k) , 475.25(1)(d), 475.42(1)(d), 475.42(1)(a),

475.25(1)(b) , and 475.25(1)(a) , Florida Statutes, as charged in

the Amended Administrativ e Complaint, and imposing an

administrative fine of $ 10, 000.00, reasonable costs, and

revocation of her license to practice real estate ; and

Finding Catherine A. Lichtman in violation of section

475.25(1)( d ), Florida Statutes, as charged in the Administrat ive

Complaint, and imposing an administrative fine of $1000.00,

reasonable costs, and revocation of her license to practice real

estate.

DONE AND ENTERED this 1 1 th day of June, 2015 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

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 1 1 th day of June , 2015 .

ENDNOTES

1/ Except as otherwise indicated, r eferences to statutes and

rules are to versions in effect in April 2 01 0 , when the counts

against Ms. Fiorello are alleged to have taken place. The

action s leading to counts against Ms. Lichtman are not alleged

to have taken place until November of 2010, and the statutes and

rules in effect at that time are specifically cited.

2 / At some point , Ms. Fiorello also prepared an ÐEscrow

VerificationÑ letter ad vising that the $40,000.00 was being held

in escrow for the purchase of the property, but it is undated

and it is not clear when this was prepared.

3/ Ms. Fiorello testified that Luxury Property Management , LLC,

had been created to work with a Miami comp any called The

Solutions Group in buying, refurbishing, and re - selling

foreclosed properties , though Department of State filings

indicate that Ms. Fiorello had originally filed Articles of

Organization under an earlier name, Skylines Luxury Property

Manage ment, LLC, as early as December of 2006. In any event,

Ms. Fiorello was aware that this entity had been dissolved at

the time th e deposit was made.

4 / As noted at hearing, Ms. Fiorello submitted pleadings to the

Circuit Court of the Seventeenth Judic ial Circuit in and for

Broward County which indicated that the deposit was initially

placed in the Luxury Management account, then transferred to

Luxury R ealty Partners operating account and remained there

Ð while the negotiations were being handled ,Ñ witho ut any

suggestion that Ms. Lichtman had moved the money from the Luxury

Management account without her consent. In Ms. FiorelloÓs later

complain t to the Department, she indicated that the deposit was

held in Luxury Realty Par t ners, Inc. , and was removed f rom that

account without her consent. Ms. Fi o relloÓs testimony on this ,

and many other matters , was simply not credible.

5 / The complete lack of proper documentation and attention to

legal requirements demonstrated by Ms. Lichtman in her business

affai rs is pervasive a nd suggest s a calculated and intentional

pattern of behavior . The self - serving documents prepared for

hearing have no probative value and could not reliably establish

facts , even if they were not hearsay. Her response s to

questions at he aring w ere evasive. Ms. LichtmanÓs testimony on

this, and many other matters, was simply not credible.

6 / Although th is rule was amended effective July 21, 2010, the

portions of the rule relevant here were not changed.

COPIES FURNISHED :

Joshua N. Ken drick, Esquire

Whitney Rebecca Hays, Esquire

Crystal D. Stephens, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street , Suite 25A

Tallahassee, Florida 32399

(eServed)

Daniel Villazon, Esquire

Daniel Villazon, P.A.

5728 Ma jor Boulevard , Suite 535

Orlando, Florida 32819

(eServed)

Robert Brian Resnick, Esquire

Law Office of Robert B. Resnick

Post Office Box 1872

Boca Raton, Florida 33429

(eServed)

Juana Watkins, Director

Division of Real Estate

Department of Business and

Professional Regulation

400 W est Robinson Street, Suite N801

Orlando, Florida 32801

(eServed)

William N. Spicola, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.