FLORIDA REAL ESTATE COMMISSION ) ex. rel. HAROLD T. MOONEY, )
vs. ) CASE NO. 76-012
) P.D. 2625
ROBERTS & GILMAN, INC., and ) DELAIR A. CLARK, )
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K.N. Ayers, held a public hearing in the above styled cause on March 11, 1976 at Winter Park, Florida.
For Petitioner: Richard J.R. Parkinson III, Esquire
For Respondent: W. Stewert Gilman, Esquire Gilman & Clark, Post Office Drawer U
Inc. Winter Park, Florida 32789
Delair A. Clark testified in his own behalf.
Special appearance Hope Strong III, Esquire, representing Post Office Box 340, witness Crummett: Winter Park, Florida 32789
By Administrative Complaint filed August 12, 1975 the Florida Real Estate Commission ex rel. Harold T. Mooney, seeks to revoke, suspend, or otherwise discipline Respondents Roberts & Gilman, Inc. and Delair A. Clark for violation of 475.25(1)(d) F.S. The former is a registered real estate broker and the latter is a registered real estate salesman. The grounds for the proposed disciplinary action is more fully set out in the Administrative Complaint and basically involves the disposition of the earnest money deposit received on the purchase of residential property in Orlando. Five witnesses were called by the Commission, two witnesses by the Respondents, and thirteen exhibits were admitted into evidence. Daniel T. Gilman was one of the witnesses called by the Commission and was recalled to testify by Respondent, Roberts & Gilman, Inc.
After having considered all evidence submitted, the following is submitted.
Robert & Gilman, Inc. at all times herein involved was registered as a real estate broker by the State of Florida. Delair A. Clark at all times herein involved was registered as a real estate salesman by the State of Florida.
Residential property owned by William L. and Frances Crummett was listed with J.B. Steelman, Jr. real estate broker and put on Multiple Listing Service. On June 17, 1972, immediately after the For Sale sign was erected, Respondent, Delair A. Clark, presented an offer to the sellers on this property which was accepted by sellers on the same date presented (Exhibit 9). This contract provided the purchase price of $28,500 with a $300 earnest money deposit, the usual clauses in a form contract for sale and purchase, and two special clauses to wit:
"A. Subject to: Buyer being reassigned to central Florida prior to June 22, 1972.
In the event the assignment does not materialize by June 23, 1972 deposit will, be returned
in full and contract will be null and void.
B. Subject to: Buyer obtaining a 90 percent conventional loan for a period of 25 years or an FHA loan for 30 years."
By telegram dated 6/20/72 (Exhibit 8) buyer confirmed re-assignment to Orlando, thus satisfying condition A in the contract.
Buyers thereafter asked for earlier occupancy than originally called for. Since special arrangements would have to be made by sellers, Mr. Crummett asked for an amendment to the contract to increase the earnest money deposit to
$1,000 of which $500 would be non-refundable if contract was not consummated. This amendment was duly executed by the buyers on July 15, 1972 and by the sellers. A copy thereof was admitted into evidence as Exhibit 11 which provides:
"SPECIAL CLAUSE"
"C. An additional deposit of $700 will be made on July 17, 1972, of which $500 will be non-refundable in the event
the referenced contract is not consumated (sic)."
This amendment was forwarded to the sellers by Respondent's Roberts & Gilman letter of July 17, 1972 which amendment was executed by the sellers upon receipt and mailed back to Roberts & Gilman. The July 17, 1972 letter was signed by Judy L. Rostatter of the sales processing department. A copy of the check received from the buyers was not enclosed although the letter stated it was enclosed.
Prior to receipt of this amendment Crummett was advised by Richter, the buyer, that he had mailed a $700 check to Roberts & Gilman made payable to Crummett. Crummett was also advised by Respondent Clark that the check had been received. Since closing was scheduled to be held within a couple of days Crummett requested Clark to hold the check and he would endorse same at closing. Crummett never saw the original check for $700.
On the day originally scheduled for the closing (circa July 18, 1972) Crummett received a telephone call from Respondent Clark to the effect that the appraisal on the property had come in some $3,000 below the asking price and inquiring if Crummett would accept $26,000 for his property. The latter advised he would not and, after some heated words, Crummett hung up. At this time it was evident to Respondent Clark and the sellers that the sale would not be consummated.
Clark put a memo in the file dated July 28, 1972 saying: "Return checks of $700 + $300 in estrow (sic) to
Richter. Seller advised we had no contract."
A few weeks later, on August 3, 1972, after making several phone calls to Roberts & Gilman without success, Crummett had the listing broker, J.B. Steelman, write a letter (Exhibit 7) to Gilman making demand for the $500 deposit refund. By letter dated August 11, 1972 (Exhibit 6) Roberts and Gilman replied that they considered the contract had been terminated by the seller and saw no "justification by the seller to claim any escrow that has been returned to the buyer". This letter was signed "Dan T. Gilman /b.c."
Several months later, in the spring of 1973, Crummett went to the office of Roberts and Gilman and obtained a photostatic copy of the check dated 7/15/72 that had been made by J.A. Richter in the amount of $700. This was admitted into evidence as Exhibit 12.
At the hearing Dan G. Gilman, President of Roberts & Gilman, Inc. denied any recollection of any part of this transaction or ever having heard of the incident prior to the investigator from the FREC coming to inquire about the incident. At the time of this transaction the realtor's office was very busy with several branch offices and some 120 salesmen handling transactions in eight or ten counties in central Florida. He has no recollection of dictating Exhibit
12 or anything about the incident but his secretary at that time was Beverly Cass. It was standard practice for a broker to review every contract before trust account money was disbursed or refunded. His initial testimony that numerous people in the office had authority to sign his name to letters going out of the office was recanted when he was recalled as a witness after the close of the Commission's case. He then stated he never authorized anyone to sign his name to a document having legal implication.
Clark testified that the first time he ever saw Exhibit 11, the amendment to the contract, was when shown to him by the investigator for the FREC. Likewise he claims never to have seen or received the $700 check signed by Richter. With respect to the return of the deposit to Richter, (after being shown Exhibit 13) his recollection of the cancellation of the contract was that Richter was not re-assigned to the Orlando area. This was the only contract ever handled by Clark which involved the return of an escrow deposit. He has no recollection of talking to any member of the realty firm regarding clearing the return of the escrow deposit to Richter. Exhibit 5 is a photocopy of the check by which the $300 earnest money deposit was returned to Richter.
It is obvious that the contract for the sale of the residential property herein involved was amended to provide for an additional deposit from the buyers and a clause which required the buyer to forfeit one half of his deposit in the event the transaction was not consummated. It is incomprehensible that such an amendment to the contract could be made without the knowledge of the salesman or the broker. It therefore appears that the
Defendants either: (1) are not telling the truth; (2) have faulty memories; (3) allowed the duties normally performed by brokers to be carried out by secretaries; or (4) operated a realty company in a slipshod manner without due regard to the duties and responsibilities imposed upon brokers and salesman by the real estate license law.
CONCLUSIONS OF LAW
Section 475.25(1)(c) provides in part that the registration of a registrant may be suspended for a period of two years upon a finding that the registrant has:
"Failed to account or deliver to any person . . . any personal property such as money . . . which has come into his hands and which is not his property . . . at the tine which has been agreed upon or is required by law
. . . upon demand of the person entitled to such accounting or delivery provided, however, that, if the registrant shall, in good faith, entertain doubt as to his
duty to account and deliver said property,
. . . he may notify Commission
promptly and ask advice thereon "
Section 475.25(1)(i) also provides in part for suspension of registration for a period of two years if the registrant has:
"Failed, if a broker, to immediately place, upon receipt any money, fund, check or draft, entrusted to him by any person dealing with him as a broker, in escrow . . . or if a salesman, fail to immediately place with his registered employer any money, fund,
deposit, check or draft, entrusted to him by any person dealing with him as agent of his registered employer."
While the Respondents herein indicated they were never aware of the existence of the amendment to the contract, only a lack of attention to the performance of the duties would have left them unaware. Knowledge of agents of the broker is imputed to the broker particularly where his duties require him to make a determination regarding the disbursement of the funds held in escrow.
Under the circumstances here involved the $700 check issued by the biker payable to the seller could not have been deposited in escrow without the endorsement of the sellers. Since this check was mailed by the buyer, the salesman or broker was not in a position to insure the check was made payable to the reality firm as it should have been. Thereafter, the only way to correct the error was to have the seller endorse the check payable to the realty firm. At the seller's suggestion this was delayed for a couple of days, then the situation deteriorated. While there was a failure to deposit these funds in escrow as required by the provisions of the statute above quoted, this was only a technical violation since the check, as held, could not have been deposited in the escrow account.
Failure to properly disburse the funds held by the broker, including the check made payable to the sellers, is a violation of 475.25(1)(c) F.S. it appears that the broker and his agents failed to properly consider all of the terms of the contract, or if they did consider all of the terms of the contract, failed to place the proper legal interpretation thereon. This constitutes negligence. A finding of specific intent is not required before a violation of this section of the statute occurs.
From the foregoing it is concluded that Respondent, Roberts & Gilman, Inc., is guilty of violation of 475.25(1)(c) and (i), and the Respondent, Delair
A. Clark, is guilty of violation of 475.25(1)(c) F.S. It is, therefore,
RECOMMENDED that Respondent, Roberts & Gilman, Inc. be issued a letter of reprimand, and that Respondent, Delair A. Clark be issued a letter of reprimand.
DONE and ENTERED this 27th day of April, 1976 in Tallahassee, Florida.
K.N. AYERS Hearing Officer
