and 475.42(1)(f) F.S. by failing to return a $1,000 deposit to the buyer or to the seller when, by reason of the parties failing to agree to the contract terms, the transaction did not close. Count II alleges that Defendants violated ss. 475.25(1)(d) and 475.42(1)(e) F.S. by closing the real estate office at the address registered with the commission and by failing to open another office in Florida. Count III alleges Defendants violated ss. 475.25(1)(a) (d) and (i) and 475.42(1)(f) F.S. by failing to maintain funds in his escrow account until disbursement therefrom was properly authorized. Count IV alleges Defendants violated ss. 475.25(1)(d) and 475.42(1)(e) F.S. and Rule 21V-9.01 F.A.C. by failing to notify the commission off a change in the address of their real estate office. Count V alleges Defendants violated ss. 475.25(1)(d) and (i) and 475.42(1)(e) F.S. and Rule 21V-14.05 F.A.C. by failing to maintain records of the escrow account. Count VI alleges that by reason of the foregoing allegations Defendants have been guilty of a course of conduct and practices which show they are so incompetent and negligent, dishonest or untruthful that the money, property, transactions and rights of investors cannot safely be entrusted to them; and, pursuant to s. 475.25(3) F.S. their registration should be revoked.
At the beginning of the hearing copies of return receipts of certified mail sent to the address of Hall Realty as registered with the commission, and to the home address of Hall containing the Administrative Complaint and Notices of Hearings were admitted into evidence as Exhibits 1 through 8. Certified copies of registration certificates of Hall Realty and Charles R. Hall were admitted into evidence as Exhibits 9 through 12.
Three witnesses who had been subpoenaed to appear at 9:00 A.M., July 8, 1976 had not appeared by 10:00 A.M. A recess was taken to permit Plaintiff to ascertain their whereabouts and to take judicial action to require their presence. Thereafter one witness appeared and subpoenas served upon the other witnesses were admitted into evidence as Exhibits 13 and 14.
At this stage of the proceedings the Motion of Plaintiff for a Continuance was granted to permit Plaintiff time to enforce the subpoenas.
When the hearing reconvened on September 15, 1976 Hall was still absent and only one of the two subpoenaed witnesses appeared to testify. Plaintiff was permitted to proffer the testimony of the witness who, although subpoenaed, had again failed to appear.
During the two sessions of the proceedings three witnesses were called by Plaintiff and 22 exhibits were admitted into evidence. No evidence was submitted by Defendant.
At all times here involved Charles R. Hall and Hall Realty Company were brokers registered with the Florida Real Estate Commission.
Following receipt of a complaint regarding the failure to return an earnest money deposit by Hall Realty, the FREC in early June, 1975 commenced an investigation. Initially it became apparent that Hall had closed his office and had gone to Alaska. In June, 1975 the Hall Realty Office was closed but the Hall Realty Company sign was still on the office. At the time of the hearing (July, 1976) the office was occupied by another realtor but no change of address or notice of relocation of the Hall Realty Company office had been received by the commission.
In the early part of 1974 Hall departed Melbourne for Alaska. Upon his departure he left some papers and funds with his wife in an envelope with instructions to turn the envelope over to Attorney Howard Warren if he (Hall) did not return within three weeks.
Mrs. Hall turned the envelope over to Warren as instructed and denies all knowledge of the contents of the envelope. She obtained no receipt from Warren for the envelope although she did know the envelope contained some papers relating to her husband's real estate business.
Exhibit 15 shows 2 deposits into Warren's account marked "Escrow (Ida Hall)" and "Escrow (Hall)", one dated May 13, 1975 in the amount of $260.15 and the other dated May 28, 1975 in the amount of $3050. By check dated November 20, 1975 Warren disbursed to Lee Caron $1,000 from his (Warren's) escrow account. Warren could not recall how long after Caron had made demand for the return of the money before it was disbursed to him; however, since it was Caron's complaint that triggered the investigation leading to the charges filed
in this case and this was received by the commission prior to June, 1975, it would appear that the demand for return of deposit was made by Caron before he filed a complaint.
Nor could Warren recall the disposition made of the balance of the money received from Hall that he had placed in his escrow account. Both Warren and Mrs. Hall denied having any real estate records belonging to Hall Realty Company; although in his response to a commission letter, Exhibit 20, Hall stated that he had left his records with his wife.
Warren acknowledged disbursing some of the Hall funds he had placed in his escrow account but could not recall to whom these funds were disbursed and he denied having the records which he was subpoenaed to bring.
Hall was last home "around Christmas" of 1975, but Mrs. Hall denies ever discussing with him the investigation by the Real Estate Commission both were aware was in progress. She further denied any discussion during his stay of any of the real estate records of Hall Realty.
CONCLUSIONS OF LAW
Section 475.25(1) F.S. provides that the registration of a registrant may be suspended for a period not to exceed two years upon a finding that the registrant has:
"(a) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, 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 con spired 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 has com mitted an overt act in furtherance of such intent, design or scheme. It shall be immaterial to the guilt of the registrant that the victim, or intended victim, of
the misconduct has sustained no damage or loss or the damage or loss has been settled and paid, after discovery of the misconduct, or whether such victim, or intended victim, thereof, was a customer or a person in confi dential relation with the registrant, or was
an identified member of the general public; or,
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 there for 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 com mission, 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, the advice of the commission or the orders of the court or arbitrators, no informa
tion against him shall be permitted to be main tained; or,
Violated any of the provisions of this chapter, or any lawful order, rule or regula tion made or issued under the provision of this chapter; or,
(i) Failed, if a broker, to immediately
place, upon receipt, any money, fund, deposit, check or draft, entrusted to him by any
person dealing with him as a broker, in escrow with a title company or banking insti tution located and doing business in Florida, or deposit said funds in a trust or escrow bank account maintained by him with some bank
located and doing business in Florida, wherein said funds shall be kept until disbursement thereof is properly authorized, or, if a salesman, failed 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. The commission shall establish rules and regulations to provide for records to be maintained by the broker and the manner in which such deposits shall be made."
Section 475.25(3) F.S. provides:
"The registration of a registrant may be revoked if the registrant shall, for a second time, be found guilty of any mis conduct that warrants his suspension under subsection (1) of this section, or if he shall be found guilty of a course of conduct or practices which show that he is so incompe tent, negligent, dishonest or untruthful
that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him."
Section 475.42 F.S. provides:
"(e) No person shall violate any lawful order, rule or regulation of the commission, which
is binding upon him."
Rule 21V-9.01 provides:
"When a broker changes the address of his principal office, he shall file a form furnished by the commission showing the old and new location, pay the required fees and surrender the old certificate, unless it is lost or destroyed. It is his duty, as well as the duty of the salesman, to have their certificates surrendered.
Partnerships and corporations are required to follow a like procedure, and are charged with the duty of having all partners, of- ficers, directors and salesmen surrender
the old and apply for the new, certificates.
Changes of address area not required from
one building to another in rural communities, or small towns where houses are not num- bered, or the names of streets commonly known, unless the post office address is changed, or the office is moved to a dif- ferent county."
Rule 21V-14.05 F.A.C. provides:
"A broker who receives a deposit such as defined herein shall preserve and make available to the Commission or its authorized representative, all deposit slips and state- ments of account rendered by the bank or trust company, or title company with trust powers, in which said deposit is placed, together with all agreements between the parties respecting the transaction, parti- cularly the deposit, and all contracts,
agreements, instructions and directions to or with the said depository, and shall keep an accurate account in his books of each deposit transaction as well as an
account in his books of each separate bank account wherein such trust funds have been deposited, together with a record of all withdrawals therefrom, and shall support such accounts by such additional data as good accounting practice requires. All such
books and accounts shall be subject to inspection by the Commission or its authorized representa- tives at all reasonable times during regular business hours."
The evidence is uncontradicted that Defendant closed his real estate office, failed to notify the FREC of this fact and continued his registration in an active status. Such conduct violates Rule 21V-9.01 F.A.C. above quoted and thereby violates 475.42(1)(e) and 475.25(1)(d) F.S. above quoted.
Transferring funds from his escrow account to Howard Warren before disbursement was properly authorized constitutes a violation of 475.25(1)(c)
F.S. above quoted.
In transferring records and accounts to his wife Hall made her his agent and when he instructed her to deliver this material to attorney Warren he authorized her to turn the agency relationship over to Warren. By accepting these funds and records Warren, who by reason of his affiliation with the Florida Bar should be fully cognizant of the duties of a fiduciary, became Hall's agent with respect to the care and custody of these monies and records. Mrs. Hall's and Warren's failure to produce these records are imputed to their principal, Charles R. Hall. The testimony of each of these putative agents of Hall was evasive, inconsistent and of dubious credibility. For example, Mrs. Hall's testimony that during her husband's visit last Christmas no mention was made of the investigation of his real estate business, with its potential effects upon his registration, defies credulity. Similarly Mr. Warren's testimony on the collateral issue of the facts surrounding the service of the subpoena upon him did little to enhance the weight to be given his testimony respecting the real estate records which the registrant evidently thought had been placed in the capable hands of Mr. Warren.
Here Defendant was notified of the charges against him and given notice of the hearing, albeit constructive notice. His wife was in communication with him and most assuredly provided him with actual notice of the proceedings pending. Thereafter the proceedings were marked by the recalcitrance of the witnesses. Nevertheless Defendant had a duty to produce the records required to be kept by Rule 21V-14.05 F.A.C. Whether Defendant himself destroyed those records, turned them over to his wife with instructions to destroy, or merely turned them over to his wife for further delivery to Attorney Warren is immaterial since the records were not produced and Defendant had a duty to produce them.
The entire train of events here uncovered, with some $5500 of purportedly escrow funds wrongfully removed from Defendant's escrow account, the failure to maintain a current address with the commission, failure to maintain required records and failure to disburse funds from the escrow account when due, demonstrate a course of conduct which shows Defendant to be so incompetent,
negligent, dishonest or untruthful that the money, property, transactions and rights of investors cannot safely be entrusted to him.
From the foregoing it is concluded that the Defendants are guilty of violation of Counts I, II, III, IV, V, and VI as alleged. It is therefore,
