95-005301 Division Of Real Estate vs. Jose A. Queipo, Jr., And Queipo International Realty, Inc., T/A Century 21 Queipo International Status: Closed Recommended Order on Monday, October 21, 1996.

Summary: Broker responsible for trust account violations that occured in his absence.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 95-5301

)

JOSEPH A. QUEIPO, JR., and )

QUEIPO INTERNATIONAL REALTY, INC., )

T/A CENTURY 21 QUEIPO INTERNATIONAL )

REALTY, )

)

Respondents. )

____________________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Administrative Law Judge, Claude B. Arrington, held a formal hearing

in the above-styled case on May 29, 30, 31 and June 17, 1996, in Miami, Florida.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

401 Northwest 2nd Avenue, Suite N-607

Miami, Florida 33128

For Respondent: Mark A. Dienstag, Esquire

Brenner and Dienstag, P.A.

21 Southeast 1st Street, Suite 800

Miami, Florida 33131

STATEMENT OF THE ISSUES

Whether the Respondents committed the offenses alleged in the Amended

Administrative Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Respondent, Joseph A. Queipo, Jr., is a licensed real estate broker and

was, at all times pertinent to this proceeding, the sole owner and broker of

record of Respondent, Queipo International Realty, Inc. (REALTY). On September

20, 1995, the Petitioner filed an administrative complaint containing 18 counts

against the Respondents that alleged certain facts and based on those facts

alleged multiple violations of statutes or rules regulating the real estate

profession. The Respondents timely requested a formal administrative hearing to

challenge the administrative complaint, the matter was referred to the Division

of Administrative Hearings, and this proceeding followed.

By order dated January 23, 1996, the Petitioner's motion for leave to file

an amended administrative complaint was granted without objection and the

amended administrative complaint (containing 22 counts) that was attached to the

motion was deemed filed. The odd numbered counts of the Amended Administrative

Complaint alleged violations by Mr. Queipo and the even numbered counts alleged

violations by REALTY.

Counts I-VI of the Amended Administrative Complaint pertained to a

transaction wherein the sellers were Tony and Ellen Cadet and the buyer was

Tangela Bynum. Petitioner conceded in its post-hearing submittal that it failed

to prove these allegations by clear and convincing evidence.

Counts VII-XII of the Amended Administrative Complaint pertained to a

listing agreement for the sale of property owned by Wilma Sue Lawton to Mario

and Elisa Machin. This transaction involved a dispute over a commission with

another real estate company. Counts VII and VIII alleged that Respondents were

guilty of culpable negligence or breach of trust in a business transaction in

violation of Section 475.25(1)(b), Florida Statutes. Petitioner conceded in its

post-hearing submittal that it failed to prove the allegations of Counts IX and

X by clear and convincing evidence. Counts XI and XII alleged that Respondents

were guilty of having failed to implement the procedures provided by Section

475.25(1)(d)1, Florida Statutes, to resolve a REALTY's disputed claim of

entitlement to deduct a real estate commission from a deposit held by it in

violation of Rule 61J2-14.011, Florida Administrative Code, and therefore in

violation of Section 475.25(1)(e), Florida Statutes.

Counts XIII-XVIII pertained to efforts by Petitioner's investigators to

subpoena Respondents' records, including records of escrow accounts, and its

efforts to audit those records. Counts XIII and XIV alleged that Respondents

were guilty of failure to preserve and make available to the Petitioner, all

books, records, and supporting documents and failed to keep accurate account of

all trust fund transactions together with such additional data as good

accounting practice requires in violation of Rule 61J2-14.012(1), Florida

Administrative Code, and Section 475.5015, Florida Statutes, and therefore in

violation of Section 475.25(1)(e), Florida Statutes. Counts XV and XVI alleged

that Respondents were guilty of fraud, misrepresentation, concealment, false

promises, false pretenses, dishonest dealing by trick, scheme or device,

culpable negligence, or breach of trust in a business transaction in violation

of Section 475.25(1)(b), Florida Statutes. Counts XVII and XVIII alleged that

Respondents were guilty of failure to maintain trust funds in the real estate

brokerage escrow bank account or some other proper depository until disbursement

thereof was properly authorized in violation of Section 475.25(1)(k), Florida

Statutes.

Counts XIX-XXII pertained to an interpleader action in Dade County Circuit

Court filed by REALTY against Aristomanis Atheras and Sergio Rodriguez to

resolve competing demands for a deposit held by REALTY in the amount of $15,500.

Counts XIX and XX alleged that Respondents were guilty of culpable negligence or

breach of trust in a business transaction in violation of Section 475.25(1)(b),

Florida Statutes. Counts XXI and XXII alleged that Respondents were guilty of

failure to account or deliver funds in violations of Section 475.25(1)(d)1,

Florida Statutes.

At the formal hearing, Petitioner presented the testimony of 13 witnesses

and offered 52 exhibits, 47 of which were admitted into evidence. Respondents

presented the testimony of 10 witnesses (including Mr. Queipo and his wife) and

offered 13 exhibits, each of which was admitted into evidence.

No transcript of the proceedings has been filed. At the request of the

parties, the time for filing post-hearing submissions was set for more than ten

days following the conclusion of the hearing. Consequently, the parties waived

the requirement that a recommended order be rendered within thirty days after

the conclusion of the hearing. Rule 60Q-2.031, Florida Administrative Code.

FINDINGS OF FACT

1. Petitioner is the agency of the State of Florida charged with the

responsibility and duty to administer the statutes and rules regulating the real

estate profession in Florida.

2. At all times pertinent to this proceeding, the Respondent, Jose A.

Queipo, Jr., was licensed by the Petitioner as a real estate broker, having been

issued license numbers 0415475 and 3001474.

3. At all times pertinent to this proceeding, the Respondent, Queipo

International Realty, Inc. (REALTY), was licensed by the Petitioner as a real

estate brokerage corporation, having been issued license number 0271997.

4. At all times pertinent to this proceeding, Mr. Queipo was the sole

corporate officer, sole owner, and sole broker of record for REALTY.

5. At all times pertinent to this proceeding, until January 27, 1995,

REALTY's offices were located at 2320 Red Road, Miami, Florida.

6. In 1994, Mr. Queipo made the business decision to form Queipo

International Realty Group, Inc., (GROUP) as a separate corporation and, through

GROUP, to open a real estate office on Crandon Boulevard, Key Biscayne, Florida.

Andrew Marrero, a licensed real estate broker had been a long term friend of Mr.

Queipo and had worked with him at REALTY. Mr. Queipo gave Mr. Marrero 50

percent ownership interest in GROUP and had Mr. Marrero act as the qualifying

broker of record for GROUP.

7. In December, 1994, Mr. Queipo became ill. On medical advice, he took

an extended vacation, leaving Mr. Marrero in charge of REALTY and GROUP. Mr.

Queipo and Mr. Marrero agreed that the REALTY offices on Red Road would be

closed and that all pending transactions for which REALTY was responsible (15 to

20 in number) would be closed by GROUP. The GROUP office was thereafter opened

on Key Biscayne.

8. Before he left on his vacation, Mr. Queipo signed a number of blank

checks on REALTY's various trust and operating bank accounts and he signed

several sheets of stationery with REALTY's letterhead. Mr. Queipo turned these

signed blank checks, signed sheets of stationery, and all books and records of

REALTY over to Mr. Marrero. Mr. Queipo also pre-signed checks on GROUP's bank

accounts and executed a corporate document that allowed Mr. Marrero to change

those accounts so that only Mr. Marrero's signature was necessary.

9. On January 27, 1995, Mr. Queipo was still out of state on his vacation.

On that date, Mr. Marrero closed the REALTY offices without advance notification

to the sales persons and other personnel employed at that office. Mr. Marrero

took possession of all equipment, furniture, files, and corporate records and

moved these items either to the GROUP office on Key Biscayne or to his personal

residence.

10. Between the time he left on his vacation in December 1994, and March

1995, Mr. Queipo returned to Miami only for a day to attend the closing of the

sale of the REALTY office building on Red Road. While he was away from Miami

between December 1994 and March 1995, Mr. Queipo stayed with relatives in New

York and rested. During this period, Mr. Marrero was in control of REALTY and

GROUP. Mr. Queipo did not return to Miami permanently until March 1995.

11. When he returned to Miami in March 1995, Mr. Queipo sought an

accounting from Mr. Marrero as to the status of REALTY and GROUP. Mr. Marrero

responded by locking Mr. Queipo out of the offices of GROUP.

12. Mr. Queipo filed suit in circuit court in Miami against Mr. Marrero in

May 1995. In June 1995, Mr. Marrero was ordered by the presiding circuit judge

to turn all books and records of GROUP and of REALTY to the Century 21 Regional

Offices so that an accounting could be performed. It was not until August 1995

that Mr. Queipo regained control of REALTY and of GROUP.

13. Petitioner determined that it would be appropriate to audit the escrow

accounts and other books and records of REALTY in January 1995, prior to the

abrupt closing of the REALTY offices on January 27, 1995. Two of Petitioner's

investigators, Kenneth Rehm and Roberto Castro, went to the REALTY office during

regular business hours prior to January 27, 1995, for the purpose of conducting

the audit. The investigators asked to see Mr. Queipo and were told by a

receptionist that Mr. Queipo was not available. The investigators were unable

to conduct the planned audit.

14. Shortly after the REALTY office on Red Road was closed on January 27,

1995, the Petitioner was notified of this fact by sales persons who had worked

at that office.

15. REALTY never maintained or operated an office at any other location

after January 27, 1995.

16. Petitioner's investigators made diligent efforts to subpoena the

REALTY records so that they could perform an audit and they attempted to

communicate with Mr. Queipo through his brother-in-law and through Martha Lara,

a secretary who worked for REALTY. 1/ Petitioner's investigators were unable

to perfect the service of a subpoena for REALTY's records until Mr. Rehm served

Mr. Queipo in person at the Dade County Courthouse on May 30, 1995. Mr. Queipo

was at the Courthouse for a hearing pertaining to the litigation he instigated

against Mr. Marrero. This subpoena required Mr. Queipo to produce the following

records of REALTY:

. . . brokerage records for the period

January 1, 1994 to present including:

All listing agreements.

All sales/purchase agreements/rental/

lease agreements.

All escrow account monthly bank state-

ments, bank deposit slips and cancelled

checks.

Operating account bank statements,

deposit slips, and cancelled checks.

Monthly reconciliations showing broker's

total trust liability.

17. In response to that subpoena, counsel for Mr. Queipo responded by

letter dated June 12, 1995, that stated, in pertinent part, as follows:

Please be advised that the undersigned

represents Jose Queipo, broker, owner of

a corporation no longer in business called

Queipo International Realty, Inc. Mr.

Kenneth Rehm personally served a subpoena

. . . upon Mr. Queipo in relation to Queipo

International Realty, Inc. . . .

* * *

. . . all matters contained within the body

of the subpoena are presently lodged with

and or controlled by Queipo International

Group, Inc. and Mr. Andrew Marrero.

As Mr. Kenneth Rehm knows, Queipo Inter-

national Group Inc. has been controlled by

a Mr. Andrew Marrero since a dispute arose

with Mr. Queipo.

As of this date Mr. Marrero retains all

of the relevant records of Queipo Inter-

national Realty Inc. that were taken by him

in January of 1995 to Queipo International

Group, Inc.'s new headquarters on Crandon

Blvd. as part of the merger and formation

of the new company . . . .

18. As of the time of the formal hearing, the Respondents had not provided

Petitioner with records that would enable Petitioner to audit the REALTY escrow

accounts.

19. At the times pertinent to this proceeding, REALTY had more than one

escrow account. One of these escrow accounts was account number 0024012750 at

the Interamerican Bank. Petitioner established that as of January 31, 1995, the

account liability (at least $28,200) exceeded the account balance ($13,794.41).

This discrepancy was detected after Mr. Queipo had given Mr. Marrero control of

the escrow accounts and had given him signed, blank checks that enabled him to

make withdrawals from the escrow accounts. Although Respondents established

that REALTY had more than one escrow account, that fact does not explain the

apparent discrepancy in account number 0024012750 at the Interamerican Bank.

20. At all times pertinent to this proceeding, Respondents knew that the

records of REALTY were subject to audit by the Petitioner. REALTY's records had

been routinely audited on three separate occasions prior to 1995 with no errors

having been detected.

21. Prior to October 1994, REALTY had a listing agreement for the sale of

property owned by Wilma Sue Lawton. The REALTY sales persons for this

transaction were Ann Freeman and Yolanda Rocabado. On October 19, 1994, a

contract for the sale of the Lawton property was executed between Ms. Lawton as

seller and Mario N. and Elisa V. Machin as buyers. This contract provided for

REALTY to receive a six percent commission when the sale closed. Since the

sales price equalled $100,000, the amount of the real estate commission was

$6,000. In connection with this transaction, the Machins paid to REALTY a

deposit in the amount of $10,000, which was placed in account number 0024012750

at the Interamerican Bank.

22. After REALTY closed its office on January 27, 1995, Ms. Freeman became

associated with a real estate company named Vision International Realty (VISION)

and Ms. Rocabado became associated with GROUP.

23. On January 31, 1995, REALTY's listing agreement with Ms. Lawton

expired. On February 3, 1995, Ms. Lawton executed a listing agreement with

VISION. This listing agreement provided for VISION to receive the six percent

real estate commission.

24. On February 3, 1995, Ms. Lawton and Mr. and Ms. Machin executed a

"Release on (sic) Deposit Receipt" that released the $10,000 deposit that had

been placed in escrow by REALTY pursuant to the contract dated October 19, 1994.

25. By an instrument executed by the Machins on February 3, 1995, and by

Ms. Lawton on February 8, 1995, the parties entered into a second contract for

the purchase and sale of the Lawton property. There were no material

differences between the contract executed in February 1995 and the contract

dated October 19, 1994. This second contract provided that VISION and GROUP

would evenly split the six percent commission. The closing for this transaction

was scheduled for on or before March 4, 1995.

26. Approximately two weeks prior to the scheduled closing, VISION asked

that REALTY transfer the $10,000 escrow deposit to a VISION escrow account so

that the funds would be available for the closing and provided a copy of the

"Release on Deposit Receipt".

27. At the time REALTY received the "Release on Deposit Receipt" and the

request to transfer those funds, Mr. Marrero was in de facto control of both

REALTY and GROUP. Thereafter, a REALTY check that had been pre-signed in blank

by Mr. Queipo and an unsigned cover letter on REALTY letterhead were sent to the

attorney who as acting as the closing agent for the transaction. The amount of

the check sent to the closing agent was $7,000. The unsigned transmittal letter

referenced the Lawton to Machin transaction and provided, in pertinent part, as

follows:

Receipt is hereby acknowledged in the amount

of $6,000 (Six Thousand Dollars) as a

professional fee for the above referenced

property.

Please be advised that the [sic] $3,000 of

the above captioned in dispute is being

forwarded to the title agent as agreed until

this matter is settled among the brokers.

28. The closing agent correctly understood the cover letter to mean that

REALTY was keeping $3,000 of the $10,000 that had been deposited as part of its

commission and that REALTY was also claiming it was entitled to receive an

additional commission of $3,000 from the $7,000 check it forwarded to the

closing agent.

29. There was no dispute that the total commission, in the amount of

$6,000, was to be paid from the $10,000 deposit that had been placed in REALTY's

escrow account in October 1994. There was also no dispute that either REALTY or

GROUP was entitled to $3,000, representing one half of the total real estate

commission. The other half of the commission was in dispute and was forwarded

by REALTY as part of the $7,000 it forwarded to the closing agent. Since Mr.

Marrero was in control of REALTY and GROUP, it is concluded that REALTY's claims

to the entire commission effectively waived any claim GROUP may have had to half

of the commission.

30. As a result of the commission dispute between REALTY and VISION, the

closing agent treated $3,000 of the $7,000 as being in dispute and not available

for use in closing the transaction. VISION objected to the transaction closing

without it being paid the $3,000 commission it was claiming. The transaction

closed because the buyers paid into the closing agent's escrow account an

additional sum of $3,000, which was used to pay VISION's commission. The sum of

$3,000 remains in the closing agent's escrow account pending resolution of the

dispute over this part of the commission. Depending on the resolution of

REALTY's commission claim, the sum belongs to either REALTY or to the Machins.

31. No formal action has been taken to resolve the dispute over this

commission. The sum of $3,000 remained in the closing agent's escrow account at

the time of the formal hearing.

32. In conjunction with a transaction involving a seller named Sergio

Rodriguez and a buyer named Aristomanis Atheras, REALTY received an escrow

deposit in the amount of $15,500. Respondents thereafter received conflicting

demands for that deposit. On November 17, 1994, REALTY filed an interpleader

action in Dade County Circuit Court. REALTY was represented in this matter by

an attorney named Raymond Albo. On June 6, 1995, REALTY was ordered by the

circuit court to deposit the escrowed funds into the registry of the court

"forthwith". Respondents did not comply with that order. Mr. Queipo testified,

credibly, that Mr. Albo failed to advise him of that order. On October 19,

1995, the circuit court entered an "Order to Show Cause" which ordered Mr.

Queipo to show cause at a hearing scheduled for November 9, 1995, why he should

not be held in contempt of court for failing to comply with the order if June 6,

1995. On November 8, 1995, Mr. Albo contacted Mr. Queipo for the first time in

a year and told him about the Order to Show Cause. Mr. Queipo determined that

the remaining REALTY escrow account had a balance of $11,000. He withdrew the

sum of $11,000 from the escrow account, added $4,500 of his personal funds to

that figure, and paid into the registry of the court the sum of $15,500 on

November 9, 1995, thereby avoiding the contempt proceeding.

i 33. Jorge Areces was acting as the general counsel for Respondents in

November 1994. It was Mr. Areces who recommended that Mr. Albo be retained to

represent REALTY in the interpleader action. Both Mr. Areces and Mr. Queipo

made repeated efforts to contact Mr. Albo about the status of the interpleader

action, but they were unable to locate him. Respondents relied on the advice of

their attorneys in dealing with the interpleader action.

CONCLUSIONS OF LAW

34. The Division of Administrative Hearings has jurisdiction of the

parties to and the subject matter of this proceeding. Section 120.57(1),

Florida Statutes.

35. Petitioner has the burden of proving by clear and convincing evidence

the allegations against Respondents. See Ferris v. Turlington, 510 So. 2d 292

(Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer

Services, 550 So.2d 112 (Fla. 1st DCA 1989).

36. Section 475.25, Florida Statutes, provides, in pertinent part, as

follows:

(1) The commission . . . 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

$1,000 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:

* * *

(b) Has been guilty of fraud, misrepresent-

ation, 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

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.

It is immaterial to the guilt of the licensee

that the victim or intended victim of the

misconduct has sustained no damage or loss;

that the damage or loss has been settled and

paid after discovery of the misconduct; or

that such victim or intended victim was a

customer or a person in confidential relation

with the licensee or was an identified member

of the general public.

* * *

(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 delivery, any

personal property such as money, fund, deposit,

check, draft . . . which has come into his

hands and which is not his property or which

he is not in law or equity entitled to retain

under the circumstances. However, if the

licensee, in good faith, entertains doubts as

to what person is entitled to the accounting

and delivery of the escrowed property, or if

conflicting demands have been made upon him

for the escrowed property, or if conflicting

demands have been made upon him for the

escrowed property, which properly he still

maintains in his escrow account, the licensee

shall promptly notify the commission of such

doubts or conflicting demands and shall

promptly:

a. Request that the commission issue an

escrow disbursement order determining who is

entitled to the escrowed property;

b. With the consent of the parties, submit

the matter to arbitration;

c. By interpleader or otherwise, seek

adjudication of the matter by a court, or;

d. With the written consent of all parties,

submit the matter to mediation . . . .

If the licensee promptly employs one of the

escape procedures contained herein, and if he

abides by the order or judgment resulting

therefrom, no administrative complaint may

be filed against the licensee for failure to

account for, deliver, or maintain the

escrowed property.

* * *

(e) Has violated any of the provisions of

this chapter or any lawful order or rule

made 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 him by any

person dealing with 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 him with some 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 . . .

37. Section 475.5015, Florida Statutes, provides, in pertinent part, as

follows:

Each broker shall keep and make available to

the department such books, accounts and

records as will enable the department to

determine whether such broker is in

compliance with the provisions of this

chapter. Each broker shall preserve at least

one legible copy of all books, accounts, and

records pertaining to his real estate

brokerage business for at least 5 years

. . . .

38. Rule 61J2-14.012(1), Florida Administrative Code, implements Section

475.5015, Florida Statutes. The rule provides:

A broker who receives a deposit as

previously defined shall preserve and make

available to the BPR, or its authorized

representative, all deposit slips and state-

ments of account rendered by the depository

in which said deposit is placed, together

with all agreements between the parties to

the transaction. In addition, the broker

shall keep an accurate account of each

deposit transaction and each separate bank

account wherein such funds have been

deposited. All such books and accounts

shall be subject to inspection by the BPR or

its authorized representatives at all

reasonable times during regular business hours.

39. Rule 61J2-14.012(4), Florida Administrative Code, reads as follows:

(4) The books, accounts and records

pertaining to the broker's real estate

brokerage business shall be preserved for a

period of not less than 5 years after receipt

of any money, funds, deposit, check or drafts

entrusted to the broker or the conclusion of

the broker's involvement in the transaction,

whichever results in a greater period of

retention of records. If any brokerage

record has been the subject of or has served

as evidence in litigation, relevant books,

accounts and records must be retained for at

least 2 years after the conclusion of the

civil action or the conclusion of any

appellate proceeding, whichever is later, but

not less than a total of 5 years as set above.

40. Rule 61J2-14.011, Florida Administrative Code, pertains to the rights

of a broker to funds that have been deposited in escrow and provides as follows:

A broker who receives a deposit shall not

have any right to or lien upon said deposit,

except upon the written agreement or order

of the depositor so long as the depositor

has sole control of said deposit, until the

transaction involved has been closed, and no

person has any claim except the party ulti-

mately to receive the same, in which case

the broker may deduct the agreed commission

unless the amount or time of payment is

disputed. In case of a dispute as to the

amount of the commission, or the time of

payment, the broker may retain only the

amount of the claim in said account and in

trust, until the dispute is settled by agree-

ment, arbitration, mediation or court

proceedings, as provided in s. 475.25(1)(d)1,

Florida Statutes. A depositor has the right

to demand return of a deposit until such time

as another party has acquired some interest

or equity, subject to the right to make an

express agreement to compensate the broker

for time and expense incurred prior to a

demand for the return of the deposit; and

such right to demand return of the deposit

shall again accrue upon a breach by the other

party to the contract or agreement under which

it is held, or the expiration of the time

fixed or a reasonable time, for performance

of the things necessary to establish the

exclusive right of such other party to said

deposit. A broker shall not deliver the

deposit to the other party to the transaction

until such transaction is closed, except as

otherwise directed or agreed to specifically

by the depositor. The interested parties

involved, other than the broker, may by

express agreement, alter the disposal of the

deposit, but the burden shall be on the

broker to establish good faith in the matter

if such agreement is to the broker's advant-

age. The broker shall recognize and comply

with the joint directions of said parties in

such cases, except where the parties act in

bad faith with intent to deprive the broker

of a commission, in which case the broker

shall proceed as provided in s. 475.25(1)(d)1.

41. The law in Florida imposes a high standard of ethical conduct upon

real estate brokers. See, for example, Zichlin v. Dill, 25 So.2d 4 (Fla. 1946).

42. Petitioner failed to establish by clear and convincing evidence the

facts that underpin the alleged violations in Counts I-VI of the Amended

Administrative Complaint. Consequently, those counts should be dismissed.

43. Counts VII-XII of the Amended Administrative Complaint pertained to

the Lawton to Machins transaction and the commission dispute pertaining to that

transaction. Counts VII and VIII alleged that Respondents were guilty of

culpable negligence or breach of trust in a business transaction in violation of

Section 475.25(1)(b), Florida Statutes. Petitioner failed to establish these

alleged violations by clear and convincing evidence. At most, Petitioner

established that REALTY deducted a commission to which it was entitled before

delivering the balance of the escrowed funds to the closing agent and thereafter

claiming entitlement to a portion of the funds delivered to the closing agent.

Petitioner failed to establish that those facts constitute culpable negligence

or a breach of trust. Counts VII and VIII should be dismissed.

44. Petitioner failed to prove by clear and convincing evidence the facts

that underpin the allegations of Counts IX and X. Consequently, those counts

should be dismissed.

45. Counts XI and XII alleged that Respondents were guilty of having

failed to implement Section 475.25(1)(d)1, Florida Statutes, procedures to

resolve a broker's disputed claim of entitlement to deduct a real estate

commission from a deposit held by the broker in violation of Rule 61J2-14.011,

Florida Administrative Code, and therefore in violation of Section 475.25(1)(e),

Florida Statutes. There was no allegation that Respondents violated these

provisions by delivering to the closing agent the balance of the escrowed funds

in the amount of $7,000 with the claim that REALTY was entitled to an additional

commission of $3,000 to be paid from the $7,000. There was no dispute that a

real estate commission of $6,000 was owed and there was no dispute that the

commission was to be paid out of the $10,000 that had been initially deposited

in escrow with REALTY. It was undisputed that VISION was only claiming half of

the total commission. The only possible dispute as to the $3,000 retained by

REALTY, representing the other half of the commission, was whether GROUP or

REALTY was entitled to that portion of the commission. Because Mr. Marrero was

in control of both REALTY and GROUP when the Lawton to Machin transaction

closed, it is concluded that there was no dispute. Consequently, it is

concluded that REALTY had the right to withhold $3,000 in payment of its

undisputed portion of the commission. Counts XI and XII should be dismissed.

46. Counts XIII-XVIII pertained to efforts by Petitioner's investigators

to subpoena Respondents' records, including records of escrow accounts, and its

efforts to audit those records. Counts XIII and XIV alleged that Respondents

were guilty of failure to preserve and make available to the Petitioner, all

books, records, and supporting documents and failed to keep accurate account of

all trust fund transactions together with such additional data as good

accounting practice requires in violation of Rule 61J2-14.012(1), Florida

Administrative Code, and Section 475.5015, Florida Statutes, and therefore in

violation of Section 475.25(1)(e), Florida Statutes. Counts XVII and XVIII

alleged that Respondents were guilty of failure to maintain trust funds in the

real estate brokerage escrow bank account or some other proper depository until

disbursement thereof was properly authorized in violation of Section

475.25(1)(k), Florida Statutes. Petitioner established these violations by

clear and convincing evidence. Mr. Queipo's misplaced trust in Mr. Marrero has

been considered as mitigating evidence in this proceeding, but it is not a

defense to these charges. Mr. Queipo, despite his illness and his extended

vacation, remained responsible for his business, for his trust accounts, and for

compliance with these trust accounting requirements. The fact that the

subpoenaed records were not available because Mr. Queipo gave them to Mr.

Marrero, the fact that the shortages in the escrow account were detected after

Mr. Queipo gave control of REALTY to Mr. Marrero, and the fact that there was

insufficient evidence to establish that these violations occurred before Mr.

Queipo became ill have been considered in determining the recommended penalty.

However, the fact that these violations would not have occurred if Mr. Queipo

had not given virtually unfettered control of REALTY's records and escrow

accounts to Mr. Marrero has also been considered.

47. Counts XV and XVI alleged that Respondents were guilty of fraud,

misrepresentation, concealment, false promises, false pretenses, dishonest

dealing by trick, scheme or device, culpable negligence, or breach of trust in a

business transaction in violation of Section 475.25(1)(b), Florida Statutes.

Petitioner did not allege that Mr. Queipo's turning over control of REALTY and

giving him signed escrow accounts constitutes the violation. These violations

should be considered subsumed in the violations alleged in Counts XIII, XIV,

XVII, and XVIII. Petitioner failed to establish that the same facts that

underpin those counts also establish a violation of Section 475.25(1)(b),

Florida Statutes. Consequently, Counts XV and XVI should be dismissed.

48. Counts XIX-XXII pertained to an interpleader action in Dade County

Circuit Court filed by REALTY against Aristomanis Atheras and Sergio Rodriguez

to resolve competing demands for a deposit held by REALTY in the amount of

$15,500. Counts XIX and XX alleged that Respondents were guilty of culpable

negligence or breach of trust in a business transaction in violation of Section

475.25(1)(b), Florida Statutes. Counts XXI and XXII alleged that Respondents

were guilty of failure to account or deliver funds in violations of Section

475.25(1)(d)1, Florida Statutes. Respondents reasonably relied on attorneys in

handling this matter and ultimately complied with the court order. That this

compliance was not timely was the fault of the attorney who was representing

REALTY in the interpleader action. Consequently, it is concluded that Counts

XIX-XII should be dismissed.

49. Petitioner has adopted disciplinary guidelines pertinent to this

proceeding by Rule 61J2-24.001, Florida Administrative Code. For a violation of

Section 475.25(1)(e), Florida Statutes, the recommended penalty ranges up to

revocation. For a violation of Section 475.25(1)(k), Florida Statutes, the

recommended range is from a minimum 90-day suspension and a fine in the amount

of $1,000 to revocation.

50. Pursuant to Rule 61J2-24.001(4), Florida Administrative Code,

deviation from the foregoing guidelines is permitted upon consideration of

mitigating or aggravating circumstances, which may include, but are not limited

to, the following:

(a) The severity of the offense;

(b) The degree of harm to the consumer or

public;

(c) The number of counts in the

Administrative Complaint;

(d) The number of times the offenses

previously have been committed by the

licensee;

(e) The disciplinary history of the licensee;

(f) The status of the licensee at the time

the offense was committed;

(g) The degree of financial hardship incurred

by a licensee as a result of the imposition

of a fine or suspension of the license; and

(h) Whether a letter of guidance has been

previously issued to the licensee.

51. Petitioner correctly argues that the escrow violations found herein

are serious offenses. It was clear that Mr. Queipo did not cooperate with the

investigators to the extent one would expect. Those factors should be

considered, but there are mitigating factors that also should be considered. As

discussed above, Mr. Queipo's illness and the fact that he was away from his

business on medical advice has been considered. That Mr. Queipo would turn to

Mr. Marrero, his long time friend and fellow real estate broker, when he became

ill is understandable and should be given weight in determining the appropriate

penalties for the violations found. There exist sufficient mitigating factors

to conclude that neither suspension or revocation is necessary or appropriate.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that Petitioner enter a final order that incorporates the

findings of fact and conclusions of law contained herein, that finds Respondents

guilty of the offenses alleged in Counts XIII, XIV, XVII, and XVIII, and that

dismisses the remaining counts of the Amended Administrative Complaint. It is

recommended that for the violations found herein, Respondents be fined in the

total amount of $4,000 and that their respective licenses be placed on probation

for a period of five years.

DONE AND ENTERED this 21st day of October, 1996, in Tallahassee, Florida.

___________________________________

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of October, 1996.

ENDNOTE

1/ Mr. Queipo denied that he had knowledge that the investigators were trying

to contact him. While that testimony is difficult to believe in light of the

extensive efforts of the investigators, there was no clear and convincing

evidence that Mr. Queipo had actual knowledge that Petitioner wanted to audit

the REALTY records until he was personally served with a subpoena at the Dade

County Courthouse on May 30, 1995.

COPIES FURNISHED:

Theodore R. Gay, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

401 Northwest 2nd Avenue, Suite N-607

Miami, Florida 33128

Mark A. Dienstag, Esquire

Brenner and Dienstag, P.A.

21 Southeast 1st Avenue, Suite 800

Miami, Florida 33130

Henry M. Solares, Division Director

Division of Real Estate

Post Office Box 1900

Orlando, Florida 32802-1900

Lynda L. Goodgame, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

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.