95-004813 Division Of Real Estate vs. Hilda H. Bell And Sharmic Realty, Inc. Status: Closed Recommended Order on Tuesday, April 2, 1996.

Summary: Respondents violated Section 475.25(1)(b)&(e), Florida Statutes, by engaging in culpable negligence, by misusing escrow account and by failing to keep required records

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 95-4813

)

HILDA H. BELL and SHARMIC REALTY, )

INC., )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on February

29, 1996, at Fort Lauderdale, Florida, before Michael M. Parrish, a duly

designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: (No Appearance)

STATEMENT OF THE ISSUES

This is a license discipline proceeding in which the Petitioner seeks to

take disciplinary action against the two Respondents, one individual and one

corporation, on the basis of alleged violations set forth in an eight-count1

Administrative Complaint. The Respondents are charged with violation of Section

475.25(1)(b), Florida Statutes, and with multiple violations of Section

475.25(1)(e), Florida Statutes.

PRELIMINARY STATEMENT

Pursuant to written notice to all parties, the formal hearing in this case

was scheduled to begin at 8:30 a.m. on February 29, 1996. At the appointed

date, time, and place, the Petitioner appeared through counsel, but there was no

appearance by or on behalf of either of the Respondents. The Hearing Officer

waited until 9:00 a.m., by which time there was still no appearance by or on

behalf of the Respondents.

The Hearing Officer called the hearing to order shortly after 9:00 a.m.,

whereupon the Petitioner began its presentation by announcing the voluntary

dismissal of the charges alleged in Counts III and IV of the Administrative

Complaint. The Petitioner then presented the testimony of one witness

(Investigator Margaret Hoskins) and offered six exhibits, all of which were

received in evidence. At the conclusion of the presentation of evidence,

counsel for the Petitioner stated that the Petitioner did not intend to order a

transcript of the proceedings at the hearing. Counsel for Petitioner requested

that the parties be allowed twenty days within which to file proposed

recommended orders. The request was granted. At no time during the course of

the hearing was there any appearance by or on behalf of the Respondents.

On March 20, 1996, the Petitioner filed a timely Proposed Recommended Order

containing proposed findings of fact and conclusions of law. All findings of

fact proposed by the Petitioner are included in the findings of fact which

follow.2 As of the date of this Recommended Order the Respondents have not

filed any post-hearing document with the Hearing Officer.

FINDINGS OF FACT

1. The Petitioner is a state government licensing and regulatory agency

charged with responsibilities and duties which include the prosecution of

Administrative Complaints against licensees under Chapter 475, Florida Statutes.

2. Respondent Hilda H. Bell is now, and was at all times material hereto,

a licensed Florida real estate broker, having been issued license number 0349586

in accordance with Chapter 475, Florida Statutes. The last license issued was

as a broker at Sharmic Realty, Inc., at the following address: 8701 Willes Road,

Unit 16-308, Coral Springs, Florida 33067.

3. Respondent Sharmic Realty, Inc., is now, and was at all times material

hereto, a corporation registered as a Florida real estate broker, having been

issued license number 0243150 in accordance with Chapter 475, Florida Statutes.

The last license issued was at the following address: 8701 Willes Road, Unit 16-

308, Coral Springs, Florida 33067.

4. At all times material hereto, Respondent Hilda H. Bell was licensed and

operating as the qualifying broker of, and an officer of Respondent Sharmic

Realty, Inc.

5. On September 27, 1994, Petitioner's Investigator Margaret R. Hoskins

audited Respondents' escrow accounts.

6. The audit revealed that the Respondents maintained Property Management

Escrow Account Number 00300066617 at Glendale Federal Bank, Fort Lauderdale,

Florida.

7. A total trust liability for the Respondents' Property Management Escrow

Account could not be determined because the Respondents did not have complete

and accurate records.

8. On August 11, 1992, the Respondents deposited $20,000.00 into their

Property Management Escrow Account for a person who did not have a checking

account.

9. On August 11, 1992, the Respondents issued escrow check number 0972 in

the amount of $20,000.00.

10. On August 18, 1992, the Respondents loaned Cecil Sailsman $500.00 from

the Property Management Escrow Account.

11. On January 12, 1993, the Respondents deposited $22,496.91 in personal

funds into the Property Management Escrow Account.

12. The Respondents subsequently disbursed $15,045.00 of the personal

funds from the Property Management Escrow Account.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has jurisdiction over the

parties to and the subject matter of this proceeding. See Section 120.57,

Florida Statutes.

14. Section 475.25, Florida Statutes, reads as follows, in pertinent part:

(1) The commission may deny an application

for licensure, registration, or permit, or

renewal thereof; may place a licensee, registrant,

or permittee on probation; may suspend a license,

registration, or permit for a period not exceeding

10 years; may revoke a license, registration, or

permit; may impose an administrative fine not to

exceed $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, 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 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.

* * *

(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.

15. Rule 61J2-14.008(1)(c), Florida Administrative Code, reads as follows:

(c) "Trust" or "escrow" account means an account

in a bank or trust company, title company having

trust powers, credit union, or a savings and loan

association within the State of Florida. Only

funds described in this rule shall be deposited

in trust or escrow accounts. No personal funds

of any licensee shall be deposited or intermingled

with any funds being held in escrow, trust or on

condition except as provided in Rule 61J2-14.010(2),

Florida Administrative Code.

16. Rule 61J2-14.010(2), Florida Administrative Code, reads as follows:

(2) A broker is authorized to place and maintain

up to $200 of personal or brokerage business funds

in the escrow account for the purposes of opening

the account, keeping the account open and/or paying

for ordinary service charges.

17. 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.

18. In a case of this nature where the potential penalties set forth in

the Administrative Complaint include the possibility of suspension or revocation

of a license or registration, the Petitioner bears the burden of proving its

case by clear and convincing evidence. See Ferris v. Turlington, 510 So.2d 292

(Fla. 1987).

19. With regard to the violations alleged in Counts III and IV of the

Administrative Complaint, those counts were voluntarily dismissed by

Petitioner's counsel at the beginning of the formal hearing. Accordingly, they

should be dismissed in the final order in this case.

20. With regard to the violations of Section 475.25(1)(b), Florida

Statutes, alleged in Counts I and II of the Administrative Complaint, the

Petitioner argues that the Respondents are guilty of a breach of trust in a

business transaction or culpable negligence. The evidence in this case is

insufficient to establish a breach of trust in a business transaction. The

evidence is, however, sufficient to establish that the Respondents have

committed culpable negligence within the meaning of Section 475.25(1)(b),

Florida Statutes. Accordingly, the final order in this case should conclude

that the Respondents are guilty of the violations charged in Counts I and II of

the Administrative Complaint by reason of culpable negligence.

21. With regard to Counts V and VI of the Administrative Complaint, the

evidence is sufficient to establish that the Respondents violated Rule 61J2-

14.008(1)(c), Florida Administrative Code, by depositing substantial amounts of

personal funds in their Property Management Escrow Account. This violation of

Rule 61J2-14.008(1)(c), Florida Administrative Code, constitutes a violation of

Section 475.25(1)(e), Florida Statutes, as alleged in Counts V and VI of the

Administrative Complaint. Accordingly, the final order in this case should

conclude that the Respondents are guilty of the violations charged in Counts V

and VI of the Administrative Complaint.

22. With regard to Counts VII and VIII of the Administrative Complaint,

the evidence is sufficient to establish that the Respondents violated Rule 61J2-

14.012(4), Florida Administrative Code, by failing to keep the books, accounts,

and records required by that rule. This violation of Rule 61J2-14.012(4),

Florida Administrative Code, constitutes a violation of Section 475.25(1)(e),

Florida Statutes, as alleged in Counts VII and VIII of the Administrative

Complaint. Accordingly, the final order in this case should conclude that the

Respondents are guilty of the violations charged in Counts VII and VIII of the

Administrative Complaint.

23. At pages 8 and 9 of its proposed recommended order, the Petitioner

suggests the following as the appropriate penalty in this case:

It is further recommended that Respondent Hilda

H. Bell be fined $3,000.00 and that Respondent

Hilda Bell's real estate brokerage license be

suspended for a period of six (6) months.

It is further recommended that following

Respondent Hilda H. Bell's suspension period,

that she be placed on probation for a period

of one (1) year and that Respondent Hilda H.

Bell, during such probationary period, provide

satisfactory evidence of having completed a 7

hour real estate brokerage escrow management

course, the 7 hours being in addition to any

other education required of the Respondent to

remain current and active as a real estate broker

in the State of Florida.

It is also recommended that Sharmic Realty,

Inc., be reprimanded.

The penalty proposed in the language quoted immediately appears to be

appropriate under the circumstances of this case.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that the Florida

Real Estate Commission issue a final order in this case to the following effect:

(1) Dismissing Counts III and IV of the Administrative Complaint;

(2) Concluding that the Respondents are guilty of the violations charged

in Counts I, II, V, VI, VII, and VIII of the Administrative Complaint; and

(3) Imposing administrative penalties consisting of the following:

(a) An administrative fine against Respondent

Hilda H. Bell in the amount of three thousand

dollars ($3,000.00);

(b) A six month suspension of the real estate

brokerage license of Respondent Hilda H. Bell;

(c) A one year period of probation for the

Respondent Hilda H. Bell, to begin immediately

following the period of suspension;

(d) A requirement that the Respondent Hilda

H. Bell complete additional education in the

form of a seven hour course in real estate

brokerage escrow management during her period

of probation; and

(e) A reprimand of Respondent Sharmic Realty, Inc.

DONE AND ENTERED this 2nd day of April 1996 in Tallahassee, Leon County,

Florida.

___________________________________

MICHAEL M. PARRISH, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of April 1996.

ENDNOTES

1/ At the commencement of the hearing, counsel for the Petitioner voluntarily

dismissed two counts and the case went to hearing on the remaining six counts.

2/ In a case of this nature, the Petitioner must prove its case even where, as

here, the Respondents fail to appear at the hearing. There is persuasive

competent substantial evidence to support all of the findings of fact proposed

by the Petitioner, all of which were adopted by the Hearing Officer. Further,

such evidence is clear and convincing.

COPIES FURNISHED:

Daniel Villazon, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, N-308

Post Office Box 1900

Orlando, Florida 32802-1900

Ms. Hilda H. Bell

8701 Wiles Road, No. 16-308

Coral Springs, Florida 33067

Henry M. Solares, Division Director

Department of Business and

Professional Regulation

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 to this recommended

order. All agencies allow each party at least ten days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this recommended order. Any exceptions to this recommended order should be

filed with the agency that will issue the final order in this case.