STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, ) RICHARD J. YELVINGTON, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1867

)

JOE SOPOTNICK, BROKER, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was held in the above-captioned matter, after due notice to the parties, on January 29, 1976 at New Smyrma Beach, Florida, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Louis B. Guttman, III, Esquire Staff Counsel

For Respondent: Joe Sopotnick in his own behalf

ISSUE PRESENTED

Whether Respondent failed to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes.

Respondent appeared at the hearing without legal counsel and was advised of his rights to same at his own expense. He elected to represent himself at the hearing. He was further advised as to his rights under the Administrative Procedure Act including the right to testify on his own behalf if he so desired. He indicated his understanding of his rights.

It was stipulated by the parties that Joseph Sopotnick, Joseph Sopotnick, Jr., and Joe Sopotnick are one and the same person.

FINDINGS OF FACT

1. At all pertinent times under consideration in these proceedings, Respondent was a registered real estate broker (Stipulation of parties, Exhibit 2)

   
   

2. In March 1974, Alvin K. Whittington of Marietta, Georgia, upon the recommendation of his job supervisor, who had dealt with Respondent in the past, called the Respondent on the telephone concerning the possibility of purchasing land in Florida. Although the Respondent indicated that he had none available at that time, he called Whittington later on in the day and told him that he had certain property which was for sale and inquired as to when he could come down to Florida to look it over. Whittington informed him that he did not know when

   he would be able to visit Florida and Respondent advised him to send a deposit in order to hold the land since there was a contractor interested in the same property. Whittington told him that he did not like the idea of placing a deposit on property that he had not seen and inquired as to whether or not he could secure a return of the deposit if, after he had seen the land he did not wish to purchase it. Respondent told him "That's no problem. You can get your deposit back". He advised him to send the deposit and that he would hold it until he came to Florida. Accordingly, Whittington sent a check for $360.00, dated March 20, 1974, to the Respondent which indicated on its face that it was a "deposit on Fla. shore lots - N.W. corner Needle Palm & 18th". The check was signed by Mrs. Whittington on a joint account with her husband. The sum of

   $360.00 represented 10 percent of a purchase price of $3600.00. After talking to Whittington, Respondent on March 20 wrote to the owners of the property, advised that a deposit check would be forthcoming and enclosed a standard sales contract for the sellers to execute and return to him. This was accomplished and Respondent then forwarded the contract to the Whittingtons for execution and return which they received on April 1st. Mr. Whittington thereupon called the Respondent and told him that he could not sign the contract without seeing the property.

   
   

3. On April 12th, he and his wife went to Florida, met with the Respondent, looked over the lots in question, and informed the Respondent that he would call him the following Monday as to whether or not he wished to make the purchase. On April 15th, Whittington called the Respondent, informed him that he did not wish to purchase the property and requested return of his deposit. Respondent informed him he could not return it and that disposition of the deposit would be a matter to be determined by the seller. Thereafter, on April 19th, Respondent wrote to the Whittingtons informing them that after careful consideration, he intended to treat the matter as a forfeiture of deposit situation, and unless he heard from them to the contrary he would disburse the deposit to the seller under the terms of the contract. However, he stated in the letter that he would apply the full deposit to any purchase that the Whittingtons might thereafter wish to make. After receipt of this letter, Whittington again called the Respondent concerning the situation at which time Respondent informed him that he would try to get 1/3 of the deposit returned if Whittington would send him a letter indicating that he would accept such an amount. Nothing further was heard from the Respondent and the deposit was never refunded (Testimony of Mr. & Mrs. Whittington, Composite Exhibit 1, Exhibits 3, 4).

   
   

4. On or about July 2, 1974, Respondent remitted 1/2 of the deposit to sellers and retained 1/2 for himself (Stipulation of parties)

   
   

5. Respondent testified that Whittington had insisted he accept the deposit and send the contract to the seller to insure that he would be able to purchase the property, and that the proposed deal was not contingent upon the buyer's satisfaction with the property. He denied telling Whittington he could get his deposit back. He also testified that after the Whittingtons viewed the property in Florida, he asked Whittington about the contract and the latter said that he had not brought it with him but would send it within a few days. That when he thereafter called upon his return to Georgia, he informed Respondent that he did not wish to make the purchase because his wife was about to have a baby. Respondent contended at the hearing that he was never sure that Whittington wanted his deposit back, however, conceded that Composite Exhibit 1f was his letter to the sellers advising that the Whittingtons had requested the return of the deposit.

6. Respondent asserted that it was his impression that if a deposit had been made in good faith, it was proper to consider that there was a binding contract even though the depositor had not signed a sales contract. He further indicated that if he was wrong in this respect he would return the deposit. At no time did the Respondent ever discuss the transaction with the sellers. He was unaware of the provisions of Section 475.25(1)(c), by which a registrant may seek advice from the real estate commission if he entertains, in good faith, doubt concerning his duty to account and deliver a deposit. Respondent has been in the real estate business for twelve years (Testimony of Respondent, Composite Exhibit 1f).

   
   

   CONCLUSIONS OF LAW

   
   

7. Petitioner seeks to take adverse action with respect to Respondent's registration as a real estate broker for failure to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes. That provision reads as follows:

   
   

   "475.25 Grounds for revocation or suspension.-

   
   

   1. The registration of a registrant may be suspended for a period not exceeding 2 years, or until compliance witha lawful order imposed

      in the final order of suspension, or both, upon a finding of facts showing that the registrant has:

      (c) Failed to account or deliver to any person, including registrants under this chapter, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document, or thing of value, including a share of a real estate commission, or any secret or illegal profit,

      or any divisible share or portion thereof, 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,

      and 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; provided, however, that, if the registrant shall, in good faith, entertain

      doubt as to his duty to account and deliver

      said property, or as to what person is entitled to the accounting and delivery, or if conflicting demands therefor shall have been made upon him and he has

      not appropriated the property to his own use or intermingled it with his own property of like kind, he may notify the commission promptly, truthfully stating the facts, and ask its advice thereon, or after notice thereof to the commission, shall promptly submit the issue to arbitration by agreement of all parties, or interplead the parties, or otherwise seek an adjudication of the question in a proper court

      and shall abide, or offer to perform, a proper court the advice of the commission or the orders of the

      court or arbitrators, no information against him shall be permitted to be maintained; or, . . ."

      
      

8. Rule 21V-14.01, Florida Administrative Code, defines a "deposit" as a sum of money delivered to a real estate broker or salesman as earnest money or part payment in connection with any real estate transaction. Rule 21V-14.04 provides that a depositor has the right to demand the return of his deposit until such time as another party has acquired some interest or equity therein. It further provides that a broker shall not deliver the deposit to the other party to the transaction until such transaction is finally closed except as otherwise directed or agreed to specifically by the depositor.

   
   

9. The contract in question, which never was executed by the prospective purchaser, but was executed by the sellers, provided in Paragraph III thereof as follows:

   
   

   "TIME FOR ACCEPTANCE: If this contract is not executed by both parties hereto on or before April 1, 1974,

   the aforesaid deposit shall be, at the option of the buyer, returned to him, and this agreement shall there- after be null and void. The date of contract, for purposes of performance, shall be regarded as the date when the last one of the seller and buyer has

   signed this contract."

   
   

10. It is clear that Respondent was in no position to do other than comply with the request of Mr. Whittington to return the $360.00 deposit upon the latter's request on April 15, 1974. No written purchase contract was ever executed by the Whittingtons and, accordingly, there could be no basis for forfeiture of deposit. Respondent's contention that by making the deposit the Whittingtons had made a valid offer which was thereafter accepted by the sellers, is without merit in view of the requirements of the statute of frauds which provides that any contract for the sale of lands must be evidenced by written agreenent, note, or memorandum thereof signed by the party to be charged or by some other person authorized by him (Section 725.01, F. S.). A check which indicates on its face "deposit Fla. Share Lots N.W. Corner Needle Palm and 18th" is not sufficient to evidence a contract for the sale of land since it does not disclose all the terms of the sale. Swisher et al. v. Conrad 80 So.264 (1919). Accordingly, it is concluded that Respondent violated Section 475.25(1)(c), as alleged, in that he failed to deliver the deposit of $360.00 which he was not entitled to retain under the circumstances and which return had been demanded by the person entitled to such delivery, to-wit: Alvin K. Whittington.

    
    

11. Respondent asserted his belief that forfeiture of the deposit was proper. His lack of knowledge as to the requirenents of the law cannot be excused by such a bare assertion of ignorance. It is incumbent upon real estate brokers who hold the monies of others in trust to insure that their disposition of funds strictly accords to law, regulation, and the understanding of the parties. Respondent's testimony to the effect that he had, in past practice, considered bona fide deposits to represent binding offers that warranted forfeiture upon failure of the offeror to execute a written contract may well be true. However, since in the instant case, the prospective purchaser had conditioned his deposit on viewing the land and then making his decision whether or not to purchase, there is no basis for Respondent's contention that a binding "deal" resulted upon the seller's execution of the contract.

12. In view of Respondent's stated intent to return the deposit upon a finding that it was improperly disbursed to the seller and himself, appropriate consideration should be taken of such an indication of willingness to conduct his transactions properly in the future, and justify amelioration of the sanction imposed.

RECOMMENDATION

1. That Respondent's registration as a real estate broker be suspended for a period of 60 days.

   
   

2. That the period of suspension in excess of 30 days be vacated if the Respondent returns the $350.00 deposit to Mr. & Mrs. Alvin K. Whittington prior to the expiration of the aforesaid period of 30 days from the original date of suspension.

DONE and ENTERED this 20th day of February, 1976, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

Docket for Case No: 75-001867

Orders for Case No: 75-001867