IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

JOHN ROLLAS,

Appellant,

v. Case No. 5D 17

- 1526 DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION,

Appellee. ________________________________/ Opinion filed February 2, 2018 Administrative Appeal from the Florida Real Estate Commission , a division o f the Florida Department of Business and Professional Regulation. Robert L. Case, of Stovash, Case & Tingley, P.A., Orlando, for Appellant. Dwight O. Slater, Chief Appellate Counsel, Department of Business & Professional Regulation, Tallahassee, for Appellee. EVANDER, J. John Rollas appeals the final order of the Florida Real Estate Commission (“FREC”) denying his claim against the Florida Real Estate Recovery Fund ( “ the Recovery Fund”). Rollas argues FREC incorrectly determine d that he did not meet the statutory requirements for an award under the Recovery Fund. We reverse.2

Peter Voigt was a licensed real estate broker. In June 2010, he formed Priority One Management Group, LLC (“Priority One”), a residential property mana gement
company. Rollas owned a number of single family residential properties, which he utilized as rental properties. In 2012, Voigt approached Rollas, seeking financing. Rollas subsequently invested money in Priority One. In return, Rollas received a n interest in Priority One, as well as an agreement that Priority One would provide property management services to Rollas at a substantially reduced fee. In February 2015, Rollas
l oaned monies to Priority One at zero percent interest to be repaid in mont hly installments. In further consideration for the loan, Priority One agreed to provide property management
services to Rollas at no cost , and Voigt agreed to personally manage Rollas’ s properties for a period of time if Priority One failed to do so. Ove r the next three years, Rollas l oaned Priority One additional monies , notwithstanding Voigt ’s and Priority One’s failure to comply with prior agreements. Rollas subsequently became aware that Voigt and Priority One had misappropriated rental proceeds and tenant security deposits that belonged to
him . In January 2016, Rollas terminated the property management agreement

. In April 2016, Rollas sued Priority One and Voigt for failure to repay l oan s,

conv ersion, breach of fiduciary duty, and civil theft. On August 31, 2016 , the trial court entered a final judgment in favor of Rollas, finding that Priority One and Voigt , jointly and severally, owed Rollas a total of $206,184.38 , as well as three

- fold of ac tual damages on the civil theft claims , based on the following findings of fact:

a. PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT, have breached the terms of a promissory note in the principal amount of $60,000, of which the sum of $37,500.00 remains due and owing[.]3 b. PRIORITY ONE MANAGEMENT GROUP, LLC, was a property management company owned and operated by PETER VOIGT, in his capacity as a licensed real estate broker.

c. PETER VOIGT agreed with JOHN ROLLAS that PRIORITY ONE MANAGEMENT GROUP, LLC , would manage various real estate properties of JOHN ROLLAS and would collect and maintain security deposits, collect and disburse rental proceeds from tenants on JOHN ROLLAS’s properties, and pay third party vendors from the gross rental proceeds to make necessary repairs to the properties.
d. PETER VOIGT collected the security deposits and rent from tenants occupying JOHN ROLLAS’s properties but then commingled the security deposits with funds of other managed properties and used the security deposits a nd rent from JOHN ROLLAS’s properties for payment of monthly operating costs of PRIORITY ONE MANAGEMENT GROUP, LLC, to pay other obligations of PRIORITY ONE MANAGEMENT GROUP, LLC, to pay invoices to third party vendors who performed services on properties not owned by JOHN ROLLAS, and to pay PETER VOIGT.

e. PETER VOIGT’s actions are a breach of his obligations of loyalty and care to JOHN ROLLAS.
f. PRIORITY ONE MANAGEMENT GROUP, LLC’s and PETER VOIGT’s actions have converted money owed to JOHN ROLLAS.
g. PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT were negligent in the handling of the security deposits and rent proceeds for the properties being managed for JOHN ROLLAS, and in failing to pay the invoices of third party vendors who provided repair s ervices to properties managed for JOHN ROLLAS.
h. The security deposits held by PRIORITY ONE MANAGEMENT GROUP, LLC, for JOHN ROLLAS total $26,801.
i. The third party vendors who provided services on the properties of JOHN ROLLAS but which were not paid f rom the gross rental proceeds collected by PRIORITY ONE MANAGEMENT GROUP, LLC, total $1,605.13.4 j. The net rent proceeds owed to JOHN ROLLAS total $133,932.69 as of February 1, 2016.
k. The actions by PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT h ave been clearly and convincingly demonstrated as violating Section 812.014, Florida Statutes , by PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT knowingly obtaining or using the property of JOHN ROLLAS, to wit the security deposits and gross rental pr oceeds, with an intent to permanently deprive JOHN ROLLAS of the monies or benefits of the monies and PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT have appropriated the monies for the use of PETER VOIGT and PRIORITY ONE MANAGEMENT GROUP, LLC. JOHN R OLLAS provided Defendants with the statutory demand letter for Civil Theft under Section 772.11, Florida Statutes , and has satisfied the conditions precedent [to] filing a cause of action for civil relief under Chapters 772 and 812, Florida Statutes

. The reafter, Rollas filed a Recovery F und claim with FRE C seeking $50,000, the
maximum amount recoverable under the statute. See § 475.484(1) (a) , Fla. Stat. (2016)

. His claim was limited to monies owed by Voigt for misappropriated security deposits, rental p roceeds, and unpaid vendor services. Section 475.482(1) , Florida Statutes, establishes the requirements for a valid claim seeking reimbursement from the Recovery
Fund: (1) The Florida Real Estate Recovery Fund shall be disbursed

. . . as reimbursement to any person, partnership, or corporation adjudged by a court of competent civil jurisdiction in this state to have suffered monetary damages by reason of any act committ ed, as part of any real estate brokerage transaction involving real property in this state, by any broker or sales associate who: (a) Was, at the time the alleged act was committed, the holder of a current, valid, active real estate license issued under this part; (b) Was neither the seller, buyer, landlord, or tenant in the transaction nor an officer or director of a corporation, a member of a partnership, a member of a limited liability5 company, or a partner of a limited liability partnership which was the seller, buyer, landlord, or tenant in the transaction; and (c) Was acting solely in the capacity of a real estate licensee i n the transaction; provided the act was a violation proscribed in section 475.25 or section 475.42.
A f t er an informal hearing , FREC voted to deny Rollas’s claim, finding that Voigt was not acting solely in the capacity of a real estate licensee in the t ransaction . Instead, FREC determin ed that Voig t was acting in a partnership agreement or joint venture, and the property management agreement was executed as a means for Voigt, acting as a loan debtor, to repay his financial obligations to Rollas . Rollas challenges this
determination , contending that he met the statutory requirements for an award under the
R ecovery F und. He assert s that his property management agreement with Voigt and Priority One allowed Voigt to obtain possession of Rollas’s rental pro perties’ rent s and security deposits, which Voigt subsequently converted to his own use. Because Voigt ’s
actions were performed solely in Voigt ’s capacity as a real estate licensee, Rollas claims
that he was entitled to recovery under the R ecovery F und. We agree. In an appeal from a final administrative action, this c ourt reviews the administrative agency’s adjudicative findings of fact for competent, substantial evidence. § 120.68(7)(b), Fla. Stat. (2016); see also McCloskey v. Dep ’t of Fin

. Se rv s. , 115 So. 3d 441, 443 (Fla. 5th DCA 2013); Keen v. Dep ’t of Bus . & Prof ’ l Regulation , 920 So. 2d 805, 807 (Fla. 5th DCA 2006). This c ourt will not substitute its judgment for that of the agency as to the weight of the evidence o n any disputed finding of fact. See § 120.68(10), Fla. Stat. However, we review the agency’s conclusion s of law de novo. Id. § 120.68(7)(d); see,6

e.g. , Abrams v. Seminole C ty

. Sch

. Bd. , 73 So. 3d 285, 294 (Fla. 5th DCA 2011). If this

c ourt finds “[t]he agency has erroneously interpreted a provision of law and a correct interpretation compels a particular action,” this c ourt will either remand the case for further
pr oceedings consistent with this c ourt’s analysis or set aside the agency’s decision. § 120.68(7), Fla. Stat.; Ci tizens of Fl a

. v. Graham , 213 So. 3d 703, 711 (Fla. 2017).
The purpose of the Recovery Fund is to provide reimbursement to persons who suffer monetary losses because of the unscrupulous ac ts of licensed brokers or
sales persons. Hendri

cks v. Dep’ t of Bus. & Prof ’ l Regulation , 183 So. 3d 1172, 1173 (Fla. 5th DCA 2016)

. The provisions governing the application of the R ecovery F und are to be “liberally construed to achieve its intended purpose” and “in favor of granting access to the remedy.” Chapp ell v. Constr

. Indus

. Recovery Fund , 835 So. 2d 339, 340 (Fla. 3d DCA 2003) (referencing Construction Industry Recovery Fund , which similarly provides reimbursement to individuals who, among other things, have recovered judgment based
on construction contr act but have been unable to collect judgment despite diligent efforts
to do so ) ; see also In r e Abrass , 268 B

. R

. 665, 686 (Bankr. M.D. Fla. 2001) (“ The [R ecovery ] Fund is a remedial device through which the FREC can reimburse members of the public who have been defrauded or otherwise monetarily harmed by a member of the real estate profession.”)

. Here, the uncontroverted evidence established that Rollas’ s claim met the requirements set forth in section 475.482(1). Specifically, it is uncontroverted that a court of competent jurisdiction entered a final judgment in favor of Rollas and against Voigt and Priority One. That final judgment recited that Rollas had suffered monetary damages in excess of $50,000 as a result of Voigt converting rental proceeds and security deposits7

that belonged to Rollas. Voigt came into possession of these funds as part of a real estate brokerage transaction

— n amely , the property management agreement with Rollas, whereby Voigt and Priority One agreed to manage Rollas’ s rental properties. It is also undisputed that at the time Voigt converted these funds, he was the holder of a current, valid, active real estate license. Furthermore, in the real estate brokerage transactions at issue, Voigt was serving as a property manager, n ot a seller, buyer, landlord, or tenant. Finally, we conclude that Voigt was acting solely in the capacity of a real estate licensee at the time he converted the rental proceeds and security deposits belonging to
Rollas. T he Department argues that the statutory requirement that a broker must have acted solely in the capacity of a licensee exists to preclude recovery in cases like this where the nature of the relationship between the licensee and the would

- be claimant is
close and multi

- faceted. The Dep artment points out that Rollas was both an investor in, and a part owner of, Priority One. We reject the Department’s argument because Rollas’ s claim against the R ecovery F und was not based on losses he incurred as a result of his decision to invest and/o r take an ownership interest in Priority One. Rather, his claim was based exclusively on the losses he incurred as a result of Voigt collecting (and subsequently converting) rents and tenant security deposits that came into Voigt ’s possession pursuant to the property management agreement. Quite simply, Voigt was solely acting as a real estate licensee when he collected those rents and tenant security deposits. In addition, the fact that Rollas negotiated free or reduced

- rate property management services did not transform an otherwise eligible property management
t ransaction into an in eligible transaction. A modified compensation agreement does not8

change the real estate licensee’s obligation to ethically perform the activities related to
the licensure. See, e.g. , Llera Realty, Inc. v. Bd. of Real Estate , 385 So. 2d 1131, 1133 (Fla. 3d DCA 1980) (observi ng that creation of Recovery F und demonstrated Florida’s recognition “of the sensitive and privileged position of those engaged in real estate to the pub lic at large ”)

. In conclusion, the evidence established that Voigt was acting solely in his capacity as a real estate licensee when he was managing Rollas’ s rental properties pursuant to a property management agreement. Due to the property management agr eement, Voigt
had access to Rollas’s rents and security deposits and subsequently converted them for his own use. Accordingly, it was error for FREC to have denied Rollas’ s claim. On remand, FREC shall enter an order approving Rollas’s claim. REVERSED and REMANDED, WITH INSTRUCTIONS.

SAWAYA and LAMBERT , JJ., concur.