STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 79-549

) PD NO. 3379

ARVIN C. MOORE and REAL )

ESTATE 3 INCORPORATED, )

)

Respondents. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice on July 13, 1979, in Chipley, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. The parties stipulated to the delayed submission of proposed findings of fact and conclusions of law, which has resulted in the issuance of the Recommended Order on this date.

The general issues are whether the Respondents violated Section 475.25(1)(a) and (i), Florida Statutes, as alleged in the Administrative Complaint as that complaint was amended orally prior the hearing.

Specifically, the issues which were presented based upon the evidence were whether the Respondents violated Section 475.25(1)(a), supra, by allegedly representing that a seller had paid $900 per acre for property, by tendering property for sale which the Respondents knew had not been transferred to the seller or was assignable under a written contract, and that the Respondent Moore failed to advised a purchaser that he was an officer of a corporate seller.

With regard to Section 475.25(1)(i), the specific issue was whether the Respondent's deposit of a purchaser's deposit receipt to the escrow account of a title company violates the cited statutory provisions.

APPEARANCES

Petitioner: Kenneth M. Meer,

Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Respondent: Russell A. Cole, Jr., Esquire

206 East Iowa Avenue Bonifay, Florida 32425

FINDINGS OF FACT

1. Arvin C. Moore was a registered real estate broker from January 3, 1977, and active firm member of Real Estate 3 Incorporated, a registered

   corporate broker with an address registered with the Petitioner Commission as Route 2, Box 59B, Chipley, Florida 32428. Prior to January 3, 1977, Alvin C. Moore was a registered real estate salesman, registered as of September 2, 1975.

   
   

2. Regarding the allegations that Respondent Moore was an officer of American Universal Investment Corporation at the time he acted as broker in the Tew transaction, the evidence presented showed that Moore resigned as president of American on April 29, 1977. Negotiations with the purchaser Tew began in the summer of 1977, and the contract between American and Tew was entered into on or about July 20, 1977. Moore was made vice president of American on November 3, 1977, some time after Tew had advised that he did not wish to complete the purchase. The evidence shows that Moore advised Tew that the property in which Tew was interested was owned by members of his family. Whether the corporation was identified as a closely-held corporation is not relevant, because Moore had advised Tew of his potential personal interest in the transaction.

   
   

3. Moore advised Tew, after Tew expressed an interest in the property, that he would see for what price his family would be willing to sell the property. Moore advised Tew that the family would sell eleven (11) acres for

   $9,900. The Administrative Complaint alleges that Moore told Tew that American's cost was $900 per acre, and that this was a misrepresentation concerning the facts of the sale. The evidence shows that the seller, White, received $36,000 from the sale of the property to American; however, American paid $4,000 in brokerage fees to Moore. American's cost was $40,000. The parcel contained approximately fifty-eight (58) acres, but this included approximately eight (B) acres of public roads. In addition some of the land was so low that it was not usable. Depending upon what cost and acreage figures were used, the price per acre varied from $620 to approximately $900 per acre. Moore was representing American in this transaction and, as a real estate broker, was permitted to present the property in its best light. Representing the purchase price as $900 is not a misrepresentation but mere puffing. Moore's sole duty to Tew was to deal at arm's length with him. No evidence exists that Moore did not deal at arm's length with Tew. Further, concerning the representations regarding the cost paid by American, it is noted that these representations are irrelevant to Tew's right to reject the tendered offer from American. No evidence was presented that Tew was induced into the contract by the representation that American paid $900 per acre for the property.

   
   

4. American tendered a written contract to White on September 23, 1976, which was rejected. However, this contract became the basis for further negotiation which resulted in an oral contract for sale between American and White. It is difficult, if not impossible, to determine when this contract was consummated; however, negotiations of certain details continued until after the Tew/American contract was executed. These negotiations between American and White included an arrangement for White to transfer the the eleven (11) acre parcel which Tew was purchasing directly to Tew and convey the remainder to American, avoiding a dual transfer and dual taxation. The Complaint alleges that Moore misrepresented the contract to Tew because American did not have title to or an assignable interest in the property. The facts show that a contract did exist between White and American, and that White concurred in the transfer to Tew. Although this oral contract was not legally enforceable, as agent for American Moore was aware that the oral contract was sufficient for American and that American was acting in reliance on its oral contract with White in making on offer to Tew. The contract between American and Tew was a valid enforceable written contract notwithstanding whether American had or obtained title to the White property. Tew could have sued for damages if American had not obtained the property, or for specific performance had American acquired the property and

   refused to transfer it to Tew. Tew's interests were not jeopardized under the contract. Although Moore's duty to American is not at issue, Moore's duty did not extend to protecting American from its own acts. Moore had no duty to advise Tew that the oral contract for purchase was not enforceable.

   
   

5. The evidence shows that Tew accepted the contract for purchase and sale for eleven (11) acres at $9,900 and was satisfied with this transaction until his sister-in-law advised him that one of White's agents had told her American had purchased the property for approximately $500 per acre. At this point, Tew sought to withdraw from the contract. This explains the origin of Tew's complaint against Moore and Tew's interest in the outcome, because the American/Tew contract contained a default clause. Clearly, Tew defaulted on the contract by refusing to go through with it when American stood ready to convey the property to him.

   
   

6. Moore deposited the $1,000 deposit check he received from Tew to the escrow account of the Washington County Abstract Company, a title company located and doing business in the State of Florida.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Petitioner charges the Respondents, Moore and Real Estate 3 Incorporated, with violations of Section 475.25(1)(a) and (i), Florida Statutes. Subparagraph (a) of Subsection (1) of Section 475.25, supra, provides that a registrant may be disciplined who has been found 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. The evidence presented does not reveal any misrepresentation which occurred in the transaction between American and Tew in which the Respondents functioned as brokers. Although American did not have a legally enforceable contract for sale from White on the property which was the subject of the contract for purchase and sale between Tew and American, Moore and Real Estate 3 Incorporated were authorized by American to offer the property for resale based on the oral contract. The contract between Tew and American was a valid contract. It would have been enforceable against American whether or not American obtained the property from White. If the transfer between White and American occurred, Tew would have been entitled to specific performance. Had White not transferred the property American, Tew could have sued American for damages. American accepted this risk when it offered the property to Tew; however, Moore was in no way responsible for American's acts or liable to Tew if American was unable to convey. The facts reveal that a purchase and sale did occur between White and American. Tew was not damaged by the contract Moore tendered to him. Damage or detriment is a necessary element in showing misrepresentation, fraud, concealment, etc., and culpable negligence. Moore did not violate Section 475.25(1)(a), Florida Statutes.

   
   

8. Subparagraph (i) of Subsection (a) of Section 475.25, supra, provides that a registrant may be disciplined if as a broker he fails 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 institution located and doing business in Florida. The evidence presented shows that Moore deposited to Washington County Abstract Company, a title company located and doing business in the State of Florida, the check received by him from Tew. Moore's actions in depositing this check to the escrow account of Washington County Abstract Company does not constitute a violation of Subparagraph (i), supra.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that no formal action be taken against the Respondents, Arvin C. Moore and Real Estate 3 Incorporated.

DONE and ORDERED this 10th day off October, 1979, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Kenneth M. Meer, Esquire Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Russell A. Cole, Jr., Esquire

206 East Iowa Avenue Bonifay, Florida 32425

Docket for Case No: 79-000549

Orders for Case No: 79-000549