STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, BOARD ) OF REAL ESTATE )
vs. ) CASE NO. 80-1912
JOHN B. ROBERTS, a/k/a )
JOHN B. ROBERTS, SR., )
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on April 27, 1981,1 in Delray Beach, Florida.
For Respondent: John B. Roberts, Sr., Pro Se
The issues posed for decision herein are whether or not the Respondent, John B. Roberts, a registered real estate broker, during times material to the allegations contained in the Administrative Complaint filed herein by Petitioner on September 15, 1980, failed to deposit earnest money into an escrow account as required, and therefore, is guilty of fraud, in violation of Chapter 475.25(1)(b) and (i), Florida Statutes (1979); failed to account for or deliver deposit funds entrusted to him, in violation of Section 475.25(1)(d), Florida Statutes (1979); whether Respondent tendered for payment three (3) checks during April of 1979, which checks were not honored when presented for payment due to "uncollected funds" and thus, Respondent violated Chapter 475.25(1)(b), Florida Statutes (1979).
Based upon my observation of the witnesses and their demeanor while testifying, arguments of counsel and the parties, and the entire record compiled herein, the following relevant facts are found.2
John B. Roberts, a/k/a John B. Roberts, Sr., is registered as a real estate broker; is licensed as a broker salesman and has been issued License No. 0145010. (Petitioner's Exhibit 1.) As such, Respondent is subject to the licensing provisions contained in Chapter 475, Florida Statutes. During times material, Respondent was the active firm member broker of, and for, Gemco Realty Corporation which was, at that time, situated with an office at 3200 North Federal Highway, Boca Baton, Florida.
On or about March 26, 1979, Respondent negotiated a Contract for Sale and Purchase wherein Jerald H. Malis agreed to purchase, for $190,000.00, Tract 87, Block 71, Palm Beach Farms Co., Plat No. 3, also known as 8298 Bridal Path, as recorded in Plat Book Pages 45/54 of the Public Records of Palm Beach County, Florida, from Louise and Marvin Norris.
The stated property was listed for sale with Patterson and Workman, Inc., corporate brokers with offices located in Boca Raton, Florida. According to the subject contract, Respondent was to retain a $25,000.00 escrow deposit and the transaction was scheduled for closing on June 15, 1979.
Marlene Patterson Rooks, a real estate broker since 1972, and a part owner of the brokerage firm, Patterson and Workman, Inc., represented the Norrises in the subject transaction. On numerous occasions from the time that the contract was entered through the scheduled closing dates, Ms. Rooks made inquiry of Respondent to ascertain whether the $25,000.00 earnest money deposit was in fact in escrow as required per contract. These inquiries were prompted based on an interoffice policy of Patterson and Workman, Inc., to verify escrow deposits when it is the listing agent and is selling through a brokerage office that it has not had prior dealings with. After repeated requests, including a personal visit to Respondent's office by Ms. Patterson, Respondent tendered to Ms. Patterson, a deposit receipt for what appears to be a $22,500.00 deposit which is, according to Respondent, a verification of the $25,000.00 earnest money deposit receipt. Respondent contends that the remaining difference was in fact placed in an escrow account of Creative Home Designs.3
Ms. Patterson had doubts as to whether the $22,500.00 deposit actually represented the $25,000.00 deposit which is the subject of this transaction inasmuch as the deposit receipt pre-dated the execution date of the subject contract by approximately one week. (See Petitioner's Exhibits 11 and 12).
When Ms. Patterson was told that the subject transaction failed to close, she later received a mailgram declaring that the subject contract had been cancelled. (Respondent's Exhibit 5). Ms. Patterson immediately requested that a portion of the deposit monies be retained since, in her opinion, said commission monies had been earned by the listing agency. (Respondent's Exhibit 6).
Eleanor Britter, a loan officer for First Federal of Broward, processed a loan application for the purchaser, Jerald H. Malis. The loan application was approved by First Federal at an interest rate of 11 1/2%. (See Petitioner's Composite Exhibit 13, and Respondent's Exhibit 7).
On August 23, 1978, Gemco Realty Corporation's active firm member broker and owner was Michael Eisenrod. During this period, Deborah Parnell was a registered real estate salesperson associated with Gemco Realty. On August 23, 1978, salesperson Parnell negotiated a Contract of Purchase and Sale whereby Lou Demarco, Inc., a Florida corporation, and Lou Demarco individually, agreed to sell Lot 38, Block 4, Boca Raton, Bath and Tennis Club, also known as 2000
N.W. 29th Road, Boca Raton, Palm Beach County, Florida; and to build thereon a house for purchaser de Buitrago on which contract de Buitrago gave a $15,000.00 earnest money deposit to Gemco Realty Corporation. That deposit was placed into the escrow account of Gemco Realty Corporation. (Credited Testimony of Eisenrod.)
On September15, 1978, Respondent then a registered real estate salesman, became associated with Gemco Realty Corporation. In November, 1978, Respondent became registered as a real estate broker and on February 19, 1979, Respondent purchased Gemco Realty Corporation from its owner-broker, Michael Eisenrod, and became the corporation's only active firm member-broker. (Petitioner's Exhibit 3.) At the time of the purchase, the stated $15,000.00 deposit on the Demarco contract was in the escrow account of Gemco Realty. At this time, the Demarco contract had not closed.
The Demarco contract ultimately failed to close and the parties to the contract agreed to disburse the $15,000.00 deposit as follows: $12,500.00 to purchasers; $1,100.00 to salesperson Deborah Parnell; and $1,400.00 to Michael Eisenrod, the former active firm member-broker and owner of Gemco Realty Corporation. (Petitioner's Exhibit 8).
Confirmation of this disbursement agreement was acknowledged by Respondent in his letter dated June 20, 1979, to Respondent's lawyer, John Downing of Fort Lauderdale, Florida. Pursuant to the terms outlined in the referenced letter, Respondent was to deliver to attorney Downing, his escrow check in the amount of $13,600.00 which represented the total disbursement to the purchaser and salesperson Parnell.4
Respondent has not returned the deposit monies referred to from the Demarco contract to date.
Rebecca Ritter, the head bookkeeper for Royal Beach Trust Company of Palm Beach, Florida, appeared and acknowledged that Respondent had escrow accounts at Royal Beach Trust Company during the period January, 1979, through July 30, 1979. (See Petitioner's Exhibit 15).
During times material herein, Respondent was the only active firm member of and for Gemco Realty Corporation. During this period, Respondent has his trust and escrow accounts in general accounts in the following banking institutions:
First Bank and Trust Company of Boca Raton, Florida;
Boca Raton National Bank, Boca Raton,
Florida; and
Royal Trust Bank of Palm Beach, Boca Raton, Florida.
On April 30, 1979, Respondent issued, on its trust account at First Bank and Trust Company of Boca Raton, checks numbered 0548 and 0549, each in the amount of $50,000.00, payable to Creative Home Designs, Inc. Neither check was honored when presented for payment and the reason being that the checks were returned due to "uncollected funds." (Petitioner's Exhibit 7). Also, on April 12, 1979, Respondent issued on its trust account at First Bank and Trust Company of Boca Raton, Florida, its check No. 0592 in the amount of $3,000.00 payable to Lou Demarco, Inc., and Nicholas Brooks. This check was also not honored when presented for payment for reason "uncollected funds." Respondent's defense to
these allegations are that he had in fact made the $22,500.00 deposit in a timely manner and that an additional deposit was on hand in the deposit of another company that he owned, Creative Home Designs, in the amount of
$2,500.00. He contends that Ms. Patterson requested evidence to ascertain that the escrow deposit was in fact made and that such evidence was provided her.
Respondent further contends that when purchaser Malis considered the contract to purchase cancelled, he merely related Malis' request to Ms. Patterson and that he presented Malis a refund in the form of a $25,000.00 check which Malis never processed.
Respondent contends further that an accounting of the escrow accounts from Gemco Realty indicated that the accounts were in shambles when he purchased the operation and that there was less than the $15,000.00 deposit on hand when he assumed ownership of the corporate escrow accounts.
Respondent acknowledged that several checks were returned inasmuch as he was attempting to separate the new escrow deposits from the old in an effort to get a true accounting of the escrow accounts. Respondent expressed his opinion that the $15,000.00 escrow deposit respecting the Demarco transaction was never placed in the escrow account. Further, Respondent contends that to the extent that monies were made on the Demarco transaction, that that payment was partially repaid in the form of a $3,000.00 check which represented a partial payment. (Respondent's Exhibit 4).
Respondent also acknowledged that he agreed to the disbursement of deposit funds from the Demarco transaction as set forth herein but that they buyer later refused to close the transaction and forfeited, in Respondent's opinion, his deposit. According to Respondent, he then attempted to get the earnest money deposits returned to the purchasers. Respondent opined that the buyer forfeited the escrow deposit tendered to Gemco Realty. Finally, Respondent contends generally that the Gemco accounts were incorrect and that he was "duped" into accepting Messr. Eisenrod's accounting as of the date that he assumed, control of the Gemco Realty Corporation's escrow accounts. Respondent also allowed that he had on deposit,, two (2) $50,000.00 checks which were returned and as a result also created checks that he had written to also be dishonored when presented for payment.5
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Chapter 120.57(1), Florida Statutes.
The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.
The authority of the Petitioner is derived from Chapter 475, Florida Statutes (1979).
Evidence herein reveals that Respondent falsely represented to broker Marlene Patterson of Patterson and Workman, Inc., that a $25,000.00 earnest money deposit was placed in escrow as required, respecting the Contract for Sale and Purchase between Jerald Malis and Marvin and Louise Norris. The evidence reveals that the deposit receipts offered by Respondent to substantiate the escrow deposit pre-dated the receipt of the deposit by approximately one week. It was also noted that the receipts offered by Respondent were in an amount different from that required i.e., $22,500.00 versus the $25,000.00 deposit
which was actually tendered by purchaser Malis. Accordingly, Respondent's assertions that he had placed the $22,500.00 deposit plus an additional
$2,500.00 deposit in an account of Creative Home Designs is rejected as being incredible and unworthy of belief. Further, the deposits were to have been placed solely in the escrow account of Gemco Realty and not into an account of Creative Home Designs. Accordingly, competent and substantial evidence was offered to establish that the Respondent is guilty of fraud, misrepresentation, dishonest dealing, trick or breach of trust in a business transaction within the intent and purview of Chapter 475.25(1)(b), Florida Statutes (1979).
Additionally, Respondent is also guilty of failing to immediately place, upon receipt, said deposit in escrow as provided and required by Chapter 475.25(1)(k), Florida Statutes (1979).
Respondent, by retaining the $15,000.00 escrow deposit from the Demarco transaction, failed to account or deliver to purchaser de Buitrago and salesperson Deborah Parnell, monies and deposits which came into Respondent's hands and which are not his property or which he is not in law or equity entitled to retain under the circumstances in violation of the provisions of Chapter 475.25(1)(d), Florida Statutes (1979).
Respondent's presentment for payment three (3) checks during April, 1979, as more fully set forth herein above, which checks were returned when presented for payment for reason of "uncollected funds" amount to acts and conduct of Respondent amounting to fraud, dishonest dealing, culpable negligence or breach of trust in a business transaction within the intent and purview of Chapter 475.25(1)(b), Florida Statutes (1979).
That the Respondent's license to practice real estate as a broker be revoked.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 24th day of June, 1981.
JAMES E. BRADWELL
Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1981.
1/ The hearing officially closed on May 22, 1981, the date that the Division of Administrative Hearings received the transcript of the proceedings.
2/ To the extent that the parties' proposed memoranda, findings of fact and conclusions of law are not incorporated herein, said findings were deemed to be either irrelevant, immaterial or not otherwise supported by competent and substantial record evidence.
3/ Creative Home Designs is an entity in which Respondent had an ownership interest. Creative Home Designs is not an affiliate or subsidiary of Gemco Realty.
$1,400.00 referred to in the agreement to disburse the $15,000.00 deposit referred to herein. (See Respondent's Exhibit 9, and Petitioner's Exhibit 8).
5/ Respondent's position was considered, however, his testimony which was uncorroborated was not credited insofar as it differed from the testimony of other witnesses. In this regard, Respondent, as a witness, was evasive and his testimony appeared, and is found to be, uncredible due to the numerous inconsistencies when examined by the testimony of other witnesses and the documentary evidence introduced. For example, on one occasion, Respondent offered that the deposit money from the Demarco transaction was never deposited while on the other hand Respondent contends that the deposit was forfeited.
Also, it is difficult to believe that Respondent would agree to a disbursement of a deposit that was not actually received.
John B. Roberts, Sr.
