STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

an agency of the State of Florida, )

)

Petitioner, )

)

vs. ) CASE NO. 77-685

) PROGRESS DOCKET NO. 3182 TYREE C. KIRK t/a KIRK REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard on June 28, 1977, in the Conference Room of the Electric Administration and Utilities Building, Ocala, Florida, before Stephen

F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented upon the Administrative Complaint filed by the Florida Real Estate Commission against Tyree Kirk, t/a Kirk Realty alleging that Kirk had failed to account for and delivery moneys belonging to Julius and Elizabeth Lau held by him in escrow on a deposit receipt contract. This matter was referred to the Division of Administrative Hearings by the Florida Real Estate Commission to conduct the formal hearing on the allegation pursuant to Chapter

120. The issue presented is whether Kirk failed to account for and deliver moneys which he held as escrow agent contrary to the provisions of Section 475.25(1)(c), Florida Statutes.

APPEARANCES

For Petitioner: Robert J. Pierce, Esquire

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Daniel Hicks, Esquire

Tucker, Hicks, Blanchard, Brannen, Dirlam and Stillwell, P.A.

Post Office Box 24 Ocala, Florida 32670

FINDINGS OF FACT

1. Kirk was a registered real estate broker licensed by the Florida Real Estate Commission at all times relative to the Administrative Complaint.

2. Juneau Edwards negotiated a valid and binding contract for sale between Wilbur Davis as seller and Julius and Elizabeth Lau as buyers. The Laus paid

   $500 as a deposit under the contract on October 3, 1975 to Edwards. The contract, Exhibit 3, contains the following provisions:

   
   

   "Full purchase price $27,500, payable

   $27,500 in cash, of which the deposit shall apply as part and sale be held by said agent (Kirk Realty) in escrow

   pending closing of transaction, balance payable in the following manner: Cash at closing, contingent upon buyer se- curing first mortgage loan from Mid-

   State Federal Savings and Loan Association of Dunnellon, Florida. . ."

   
   

   The contract also contains a provision that the buyer forfeits his deposit if he fails to perform under the terms of the contract.

   
   

3. The Laus submitted an application for a first mortgage in the amount of

   $21,000 on October 6, 1975, which was disapproved for that amount. Disapproval was communicated to the Laus by a letter from David L. Belcher dated October 15, 1975, Exhibit 7. The evidence reveals that the amount of the loan requested exceeded 80 percent of the appraised value of the Davis property by $34,000.

   Pursuant to the contingency provision of the contract, the contract was void when then loan request was disapproved. However, when the Laus met with Edwards and Kirk they advised them that the loan had not been approved in the amount requested, but did not demand the refund of their $500.00 deposit. Instead, when Kirk and Edwards suggested that Davis be advised and negotiations for a lower price for different terms be undertaken, the Laus assented to this.

   Arrangements were made by Kirk for such a meeting between Davis and the Laus; however, the Laus did not attend this meeting because they had become interested in a second house which they ultimately purchased. On October 23, 1975, the Laus applied for a mortgage to Mid-State to purchase another house using their initial application and changing the amount of the loan request to $17,500.

   This application was approved and the Laus closed on the second house. The Laus did not tell Kirk of their other negotiations on the second house and Kirk learned of the Lau's contract for the second house through Mid-State.

   
   

4. After contracting to purchase the second house, the Laus contacted Kirk Realty requesting a refund of the $500 deposit paid on the Davis contract. Kirk visited the Laus at their new house and advised them that he considered them in default under the Davis contract. Kirk distributed the money to Davis and Kirk Realty on December 5, 1975 under the forfeiture provisions of the contract.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Florida Real Estate Commission has authority to cause charges to be filed against and to adjudicate the matters presented in the Administrative Complaint pursuant to Chapters 120 and 475, Florida Statutes.

   
   

6. Kirk is charged under Section 475.25(1)(c) with failure to account or deliver the funds deposited with him to the Laus. Factually, Kirk is in violation of this provision because when the loan application was disapproved, the contingency provision of the contract voided it. Therefore, upon demand, Kirk should have returned the deposit to the Laus. However, there are certain mitigating factors which should be considered in this case. First, the Laus

   made no demand for the return of their money but instead assented to further negotiations with Davis through Kirk Realty while leaving the money on deposit. Second, although the Laus continued their house hunting and became interested in the second house upon which they made an offer, they did not tell Kirk. It was only after they had submitted a loan application which was approved for the second house, that Kirk learned of their actions through Mid-State. Therefore, by permitting negotiations to continue while leaving their money on deposit, the Laus acted as though they sought to purchase the Davis property and left a binder on it. Their actions regarding the purchase of the second house were not communicated to Kirk which initially prevented Kirk from being aware that the Laus did not consider themselves bound by any contract, and later give Kirk the impression that the Laus were acting contrary to their written contract with Davis and their oral representation to Kirk.

   
   

7. In conclusion, the contract upon which the deposit was made was voided when the Lau's initial loan application on the Davis property was disapproved. Kirk should have returned the money to the Laus when they ultimately made demand for return of their deposit; or, if he had doubts concerning the Lau's entitlement to the deposit, Kirk should have strictly complied with the provisions of Section 475.25(1)(c), Florida Statutes. Clearly, the evidence indicates that Kirk did not violate this statute in bad faith but misconstrued the provisions of the initial contract and the actions of the Laus. Although not a defense to the violation charged because Kirk should have known that the contract had been voided and therefore could not be defaulted, these additional factors may be considered to mitigation of Kirk's violation of Section 475.25(1)(c), supra.

RECOMMENDATION

The Hearing Officer, based on the foregoing Findings of Fact and Conclusions of Law, and considering the factors in mitigation mentioned above, would recommend that Kirk be ordered to pay Lau $500 and receive a letter of admonition.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 19th day of August, 1977.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

APPENDIX A

1. The proposed findings regarding the contract and its provisions between the Laus and Davis presented in paragraph 1 of the Proposed Recommended Order are contained in paragraph 2 of the Recommended Order.

2. The proposed findings regarding the negotiations before and after the disapproval of the loan application between the Laus and Juneau Edwards, a/k/a Zerban, presented in paragraph 1 of the Proposed Recommended Order are contained in paragraph 3 of the Recommended Order.

3. The proposed findings regarding the submission of the loan application to Mid-State Federal Savings and Loan Association and its disapproval presented in paragraph 1 of the Proposed Recommended Order are contained in paragraph 3 of the Recommended Order. The testimony of Belcher in his deposition clearly established that it was disapproved for the amount sought.

4. The proposed findings that the Lau-Davis contract was valid presented in paragraph 2 of the Proposed Recommendation Order is contained in paragraph 2 of the Recommended Order.

5. The proposed finding that the Laus failed to make demand for their deposit presented in paragraph 3 of the Proposed Recommended Order is contrary to the testimony and evidence which indicated that the Laus delayed in making demand for return of their deposit as found in paragraph 3 of the Recommended Order and later requested their money back after contracting to purchase the second house as found in paragraph 4 of the Recommended Order.

6. The proposed finding that the Laus breached the contract is a legal conclusion contrary to that reached by the Hearing Officer based upon the contingency provision of the contract which made the contract contingent upon approval of the Lau's loan application. When that application was disapproved, the contact became void. Therefore, the Laus could not have breached it. The Lau's representations to Kirk that Kirk should continue negotiations with Davis does not create another contract between Davis and the Laus; however, it can and has been considered in mitigation of the impression the Laus gave Kirk regarding their continued interest in the Davis property which lead Kirk to the erroneous conclusion the Laus had breached the contract. The proposed finding that there was no violation of Section 475.25(1)(c) presented in paragraph 4 of the Proposed Recommended Order Conclusions of Law is contrary to the evidence and testimony.

The Proposed Recommended Order has been fully considered by the Hearing Officer this 19th day of August, 1977.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Robert J. Pierce, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Daniel Hicks, Esquire

Tucker, Hicks, Blanchard, Brannen, Dirlam and Stillwell, P.A.

Post Office Box 24 Ocala, Florida 32670

================================================================= AGENCY FINAL ORDER

================================================================= FLORIDA REAL ESTATE COMMISSION

FLORIDA REAL ESTATE COMMISSION,

an Agency of the State of Florida

Petitioner, PROGRESS DOCKET NO. 3182 MARION COUNTY

vs. CASE NO. 77-685

TYREE C. KING, t/a KIRK REALTY,

Respondent.

/

FINAL ORDER

At a regular meeting of the Florida Real Estate Commission held at its Executive Headquarters in Winter Park, Florida on September 23, 1977.

PRESENT: Maggie S. Lassetter, Chairman

Levie D. Smith, Jr., Vice Chairman Arthur N. Hamel, Member

APPEARANCES: Robert J. Pierce

Attorney for Petitioner Tyree C. Kirk, Respondent

This matter came on for Final Order upon the Hearing Officer's Recommended Order, the Petitioner's and Respondent's Exceptions thereto, and upon consideration thereof, together with a review of the complete record and oral arguments of counsel for the Petitioner and the Respondent in person, and the Commission being fully advised in the premises finds:

1.

That Respondent, Tyree C. Kirk, is a registered real estate broker t/a Kirk Realty, U.S. 41 and Rainbow Lakes Blvd., Dunnellon, Florida.

2.

The Petitioner's Exceptions to the Hearing Officer's Recommended Order are well taken and should be accepted.

3.

The Respondent's Exceptions to the Hearing Officer's Recommended Order are not well taken and should be rejected.

4. IT IS THEREUPON ORDERED THAT:

(a) The Petitioner's Exceptions to the Hearing Officer's Recommended Order be, and the same are hereby, accepted.

(b)..The Respondent's Exceptions to the Hearing Officer's Recommended Order be, and the same are hereby, rejected.

(c) The Hearing Officer's Findings and Fact and Conclusions of Law be, and the same are hereby, adopted by the Commission.

5.

IT IS FURTHER ORDERED that the Hearing Officer's Recommendation as to penalty, to wit: that Kirk be ordered to pay Lau $500 and receive a letter of admonition, be, and the same is hereby, rejected.

6.

IT IS THEREUPON ORDERED that the Respondent, Tyree C. Kirk t/a Kirk Realty, be and is hereby, found guilty of violating Subsection 475.25(1)(c), Florida Statutes, as charged in the Administrative Complaint.

IT IS FURTHER ORDERED that for said violation the registration of the Respondent, Tyree C. Kirk, be, and the same is hereby, suspended for a period of six (6) months. Said suspension to become effective on the effective date of this Order as provided by law.

IT IS FURTHER ORDERED that all of said six month suspension shall be suspended upon the Respondent, Tyree C. Kirk, delivering the sum of $500 to Mr. and Mrs. Julius Lau prior to the effective date of this Order. If such delivery takes place on or after the effective date of this Order, then and in that event, only so much of the aforesaid six month suspension as remains from the date of delivery shall be suspended. It shall be the duty of the Respondent to notify and provide the Commission with good and sufficient proof of such delivery.

7.

IT IS FURTHER ORDERED that on or before the effective date of this Order, Respondent Kirk shall surrender his registration certificate to the Commission by return mail.

DONE and ORDERED at Winter Park, Florida this 23rd day of September, 1977.

MAGGIE S. LASSETTER

Chairman

L. D. SMITH, JR. Vice Chairman

A. N. HAMEL Member

I HEREBY certify that I mailed a copy of the foregoing Order to Daniel Hicks, Esquire, P.O. Box 24, 520 S.E. Fort King Street, Ocala, Florida, 32670, Attorney for Respondent, and to Respondent, Tyree C. Kirk, U.S. 41 & Rainbow Lakes Blvd., Dunnellon, Florida, by United States registered mail this 23rd day of September, 1977.

Executive Director

NOTICE TO RESPONDENT

This Order shall become effective upon the 24th day of October, 1977. You have a right of review by an Appellate court, if you decide.

Docket for Case No: 77-000685

Orders for Case No: 77-000685