96-002347 Division Of Real Estate vs. Maria E. Vaca, T/A Vaca Realty Status: Closed Recommended Order on Friday, September 27, 1996.

Summary: Real estate broker failed to make available book and records necessary for Department to audit escrow account.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND, )

PROFESSIONAL REGULATION, DIVISION )

OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 96-2347

)

MARIA E. VACA, t/a VACA REALTY, )

)

Respondent. )

______________________________________)

RECOMMENDED ORDER

This case was heard on September 11, 1996, in Fort Lauderdale, Florida, by

David M. Maloney, 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

For Respondent: Maria Vaca, pro se

1731 Southeast 13th Street

Fort Lauderdale, Florida 33316

STATEMENT OF THE ISSUES

Whether Respondent, a licensed Florida real estate broker, failed to make

available to the department, as charged in the administrative complaint in this

case, such books, accounts and records as would have enabled the department to

determine whether Respondent is in compliance with the provisions of Chapter

475, Florida Statutes? If so, what is the appropriate discipline?

PRELIMINARY STATEMENT

On May 16, 1996, the Division of Administrative Hearings received a request

for a formal proceeding pursuant to Section 120.57(1), Florida Statutes, from

the Department of Business and Professional Regulation.

Attached to the request was a copy of an Administrative Complaint and an

Election of Rights form. Reciting allegations of fact first, the complaint

ultimately charged respondent with failure "to make all books and accounts

available to the [department] at all reasonable times during regular hours as

required by [Section] 475.5015, Fla. Stat. and Fla. Admin. Code R. 61J2-

14.012(1) ...". Administrative Complaint, p. 2. It, therefore, charged

Respondent to be "in violation of [Section] 475.25(1)(e), Fla. Stat." Id.

The copy of the Election of Rights form, signed by Ms. Vaca, indicated that

she disputed all of the allegations of fact contained in the complaint and

requested the form "be considered a petition for a formal hearing pursuant to

Section 120.57(1), [Florida Statutes,] ...".

The case was assigned to a hearing officer at the Division of

Administrative Hearings and re-assigned to the undersigned. A proposed

recommended order was submitted by petitioner on September 23, 1996. Respondent

did not submit a proposed recommended order. Rulings on the proposed findings of

fact are contained in the appendix to this order.

FINDINGS OF FACT

The Parties

1. Petitioner, the Division of Real Estate, Department of Business and

Professional Regulation, (the "division" or the "department,") created by

Section 20.165, Florida Statutes, and, in part, comprised of the Florida Real

Estate Commission, provides "[a]ll services concerning [Chapter 475, Florida

Statutes], including ... recordkeeping services, examination services, legal

services, and investigative services, and those services in Chapter 455 [general

provisions in regard to the state's regulation of professions and occupations]

necessary to perform the duties of [Chapter 475, Florida Statutes]." Section

475.021, Florida Statutes. Chapter 475, Florida Statutes, is the law which

regulates real estate brokers.

2. Respondent, Maria E. Vaca t/a Vaca Realty, is now, and at all times

material to this case, has been a real estate broker licensed by the State of

Florida. The number of her license, originally issued in June 1, 1981, is

0333239. Her license, current through September 30, 1997, shows the location of

her brokerage to be 120 E. Oakland Park Boulevard 105, Fort Lauderdale, Florida,

33334.

Books, Accounts and Records to be Available

3. Section 475.5015, Florida Statutes, requires that "[e]ach 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."

4. 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

statements 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.

Attempts at an Audit

5. In March of 1994, the department decided to conduct an audit of

Respondent's escrow account.

6. Two of the department's investigators, Monroe Berger and Margaret

Hoskins, with fifteen years of experience at the department between them,

scheduled a meeting with Ms. Vaca for April 11, 1994, in order to conduct the

audit.

7. Ms. Vaca, indicating that her records were in storage, cancelled the

meeting.

8. A second meeting was scheduled for April 20, 1994, in order to allow

Ms. Vaca to retrieve the records.

9. Ms. Vaca failed to attend the meeting. Instead, she transmitted by

facsimile to Investigator Hoskins copies of nine bank statements under the name

of "Vaca Realty Trust Account," for what appears to be the period from June 5,

1993 through April 5, 1994. (Generally monthly statements, one of the

statements appears to be for the first quarter of 1994, from January 6 through

April 5, 1994.) There were no reconciliation statements attached to the bank

statements.

10. The bank statements provided were insufficient to conduct an audit of

the escrow account.

11. On April 21, 1994, another meeting was scheduled with Ms. Vaca for

April 29, 1994.

12. In addition, Investigator Berger sent Ms. Vaca a letter confirming the

April 29, 1994, meeting and asking Ms. Vaca to bring with her specific records

necessary to allow the audit to be conducted. Investigator Berger wrote:

This is to confirm our telephone conversation

of 4-21-94. It is unfortunate that some

personal problems have caused you to cancel

the two previous appointments with

Investigator Hoskins.

In any event we are looking forward to

seeing you on 4-29-94 at 1:00PM, at which

time you will provide your office records

for the last year. They will include but

not be limited to (i) Trust liability

reconciliations, (ii) Bank statements with

cancelled check vouchers and deposit slips

and (iii) files relating to both closed and

open transactions.

Petitioner's Exhibit No. 2.

13. Ms. Vaca failed to appear for the April 29, 1994, meeting. Again,

another meeting was schedule, this one for May 2, 1994.

14. Ms. Vaca failed to appear for the May 2, 1994 meeting.

15. On September 22, 1994, Investigator Berger and his supervisor, Don

Piersol, went to Ms. Vaca's office to conduct the audit. Ms. Vaca did not have

her escrow account records on hand. She agreed, however, to bring them to a

meeting scheduled for October 10, 1994.

16. At the October 10, 1994 meeting, Ms. Vaca provided a check book but

she did not provide any trust liability reconciliations or deposit slips for the

previous year's transactions. Without these records an audit cannot be

conducted. In addition, Ms. Vaca did not provide all files relating to open and

closed transactions for the previous year, which also are necessary to conduct

an audit.

17. Ms. Vaca remembers missing only one, (perhaps two) of the meetings

scheduled by the department and that because of the emergency hospitalization of

her father. Certainly, her father's illness excuses abrupt cancellation of a

meeting. This record is clear, however; Ms. Vaca repeatedly failed to produce

the required records.

Production at Hearing

18. At hearing, Ms. Vaca produced six bank statements for what appears to

be the period of the first week of September 1993 through May 5, 1994. (Five of

these statements match five of the nine statements faxed to the department in

April of 1994. Again, the statements are for one month's time, with the

exception of the quarterly statement for the first quarter of 1994.) Attached

to each of the six bank statements is a Real Estate Trust Account Monthly

Statement Reconciliation form including a "Brokers Trust Liability

Reconciliation."

19. Had the reconciliation statements been provided earlier, there still

would not have been enough records provided for an audit to be conducted.

Deposit slips and cancelled check vouchers, records necessary to conduct the

audit, have never been provided the department. Nor has Ms. Vaca to date

produced all the files of transactions, open or closed, conducted during the

year prior to whenever an audit has been attempted.

20. As of the date of hearing, Ms. Vaca continued to fail to appreciate

what records should be provided the department, records she was clearly on

notice of as deemed necessary to an audit by the department at least since Mr.

Berger's letter in April of 1994. This record does not disclose any legitimate

reason for Ms. Vaca's repeated failure to produce the requested records.

21. As of the date of hearing, an audit had still not been conducted of

Ms. Vaca's escrow accounts because the department has never been given access to

the records necessary to conduct the audit.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter of this case. Section 120.57(1), Florida

Statutes.

Violations Proven

23. The burden of proof is on the department in this case. Balino v.

Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA

1977). The department has carried that burden of proof.

24. The department has shown by clear and convincing evidence that

beginning more than two years ago, on six separate occasions, it attempted to

meet with Ms. Vaca to conduct an escrow account audit. After Ms. Vaca's

inability to meet with the department the first two times and the production by

facsimile of records insufficient to allow an audit to be conducted, the

department wrote Ms. Vaca with clear instructions of what records she was

required to produce. Following this letter of instruction, the records were not

produced at two additional times scheduled by the department that constituted

opportunities for Ms. Vaca to comply with the statute and the rule. When Ms.

Vaca's place of business was visited by the department, the records were not

available. In one last chance following this visit, at a meeting scheduled by

the department, Ms. Vaca failed once again to produce the necessary records.

25. The department has proven that Ms. Vaca is in violation of Section

475.5015, Florida Statutes and Rule 61J2-14.012(1), Florida Administrative Code.

Penalty

26. In its proposed recommended order, the department seeks suspension of

Ms. Vaca's license for one year followed by one year of probation, with the

condition that she attend and successfully complete a seven hour escrow

management course. In addition, the department seeks imposition of an

administrative fine of $1,000.

27. The department has the authority to place a licensee on probation and

may impose an administrative fine of $1,000 for a broker's violation of

provisions of Chapter 475, Florida Statutes, or a rule made under those

provisions. Section 475.25(1)(e), F.S. In addition, the department may suspend

a license for such a violation, id., but only if the violation is proven by

clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987);

and, Pic 'N' Save v. Department of Business and Professional Regulation, 601

So.2d 245 (Fla. 1st DCA 1992).

28. The violations of Section 475.5015, Florida Statutes, and Rule 61J2-

14.012(1), Florida Administrative Code, were proven in this case by clear and

convincing evidence.

29. The Florida Real Estate Commission in its Disciplinary Guideline Rule

provides for up to 8 years suspension or revocation of a license for the

violation of any provision of Chapter 475, Florida Statutes, or rule made under

the provisions of the chapter, such as occurred in this case. Rule 61J2-

24.001(3)(f), F.A.C. Furthermore, the minimum penalty for the violation "is a

reprimand and/or a fine up to $1,000 per count." Rule 61J2-24.001(3), F.A.C.

30. The penalties sought by the department are within the range provided

by the applicable disciplinary guidelines. But, the motive for Ms. Vaca's

failure to provide the records was not proven in this case. It is not shown on

this record whether she was unable or simply unwilling to comply or if something

more sinister was involved. Moreover, an administrative fine, suspension and

probation, seem unnecessarily cumulative. An administrative fine, by itself,

other than creating pecuniary punishment, might not accomplish what the

department seems to hope to achieve: any future practice by Ms. Vaca as a real

estate broker in compliance with the laws of the state and with respect for

state authorities. Suspension and probation have the better chance of producing

such a result, particularly if the probationary period is conditioned in the

manner advanced by the department.

RECOMMENDATION

Based on the foregoing, it is, hereby,

RECOMMENDED:

That the Commission suspend the license of Maria E. Vaca t/a Vaca Realty

for six months and that at the end of the suspension Ms. Vaca be placed on

probation for as long as it takes to attend and complete a seven-hour course in

management of escrow accounts. In addition, probation should be conditioned

upon production of the records the Department needed to conduct the audit

attempted in 1994.

DONE AND ENTERED this 27th day of September, 1996, in Tallahassee, Leon

County, Florida.

___________________________________

DAVID M. MALONEY, 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 27th day of September, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-2347

1. Paragraphs 1 through 16, insofar as material, are adopted, with the

exception of the statement in paragraph 8 that respondent sent by facsimile "six

copies of her escrow account bank statements to Investigator Hoskins." (e.s.)

Respondent sent copies of nine bank statements by facsimile.

COPIES FURNISHED:

Henry M. Solares

Division Director

Division of Real Estate

Post Office Box 1900

Orlando, Florida 32801-1900

Lynda L. Goodgame

General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Daniel Villazon, Esquire

Division of Real Estate

Department of Business and

Professional Regulation

Post Office Box 1900

Orlando, Florida 32801-1900

Ms. Maria E. Vaca

1731 Southeast 13th Street

Fort Lauderdale, Florida 33316

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 10 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.