STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2556

)

LOU W. GEORGE, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Miami, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert Benton II, on January 7, 1982. The Division of Administrative Hearings received the transcript of proceedings on April 26, 1982. The parties were represented by counsel:

APPEARANCES

For Petitioner: Joel S. Fass, Esquire

Northeast 124th Street North Miami, Florida 33161

For Respondent: Adam Kurlander, Esquire

1820 Northeast 163rd Street North Miami Beach, Florida 33162

By administrative complaint dated September 2, 1981, petitioner alleged that respondent, while "a licensed real estate broker in the State of Florida. .

.on June 29, 1979,. . .signed a contract to purchase the home of John F. German, 1105 Sharazad Boulevard, Opa locka. . .[which] contract is also a receipt for a deposit in the sum of $500.00 to be held in escrow by Apollo Realty"; that this "contract provides that in the event of the Buyer's default or failure to follow through with the purchase of the home, the Seller has the option of either taking legal action to enforce the contract or retaining one-half of the deposit"; that respondent "failed to place the $500.00 deposit in an escrow account. . .failed to purchase the subject property. . .[and] repeatedly refused to deliver to Mr. German the share of the deposit that under the contract is due Mr. German as a result of Respondent's breach"; that "by reason of the foregoing, Respondent is guilty of failing to account or deliver to Mr. German a portion of the deposit money due him under the contract, in violation of Section 475.25(1)(d), Florida Statutes (1979). . .of failure to place the $500.00 deposit in escrow, in violation of Section 475.25(1)(k),. . .[and] of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest

dealing by trick, scheme or device, culpable negligence and breach of trust in that he signed and induced Mr. German to sign a contract showing receipt of a

$500.00 deposit to be put in Apollo Realty's escrow when in fact he had no intention of so placing such funds, in violation of Section 475.25(1)(b), Florida Statutes (1979)."

After respondent disputed the allegations of the administrative complaint and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes (1981), petitioner requested the assignment of a hearing officer, pursuant to Section 120.57(1)(b)3, Florida Statutes (1981). See Section 120.57(1)(a)1, Florida Statutes (1981).

At the final hearing, counsel for petitioner represented that a subpoena had been served on respondent's business associate, Allen Scherer. Mr. Scherer did not appear at the hearing to testify in response to the subpoena (or voluntarily on behalf of the respondent, his business partner, but there was no motion for continuance.

FINDINGS OF FACT

1. Louis W. George has been registered as a real estate broker in Florida for seven years; he holds license No. 0030981. At all pertinent times, he has done business as Apollo Realty of Miami, and has been, in addition, co-owner with Allen Scherer of Karma Properties, Inc.

   
   

2. In an effort to sell a house he owned at 1105 Sharazad Boulevard in Opa locka, Florida, John F. German placed a classified advertisement in a newspaper. Seeing the ad, respondent George telephoned Mr. German and offered his services as a real estate broker. As a result, Mr. German eventually signed an agreement listing the house with Apollo Realty of Miami for 90 days, which elapsed without a sale, in late 1978 or early 1979.

   
   

3. In June of 1979, Mr. German again visited respondent, telling him he would let the property go for $25,000. The following day respondent telephoned Mr. German to say, "I'll take it," to which Mr. German replied, "That was yesterday." Later in the telephone conversation, however, Messrs. George and German agreed on a price of $25,000. On June 29, 1979, respondent presented Mr. German with a form "Deposit Receipt." Petitioner's Exhibit No. 2. Mr. German lined through $23,500, substituted $25,000, initialled the alteration, and signed the document. Respondent had already signed. Petitioner's Exhibit No. 2 recites:

   
   

   Receipt is hereby acknowledged of the sum of

   . . .$500.00. . .from KARMA PROPERTIES, INC.

   proceeds to be held in escrow by APOLLO REALTY OF MIAMI subject to the terms hereof. . .

   
   

   This offer is subject to obtaining an FHA commitment of not less than $35,000.00 if commitment is less than-the above $35,000.00 this offer will be null and void . . .

   
   

   [I]n case of default by the purchaser. . .the seller may at his option retain one-half of the deposit herein paid as consideration for the release of the purchaser. . .

   These written provisions notwithstanding, respondent told Mr. German that he would give the $500 deposit to his attorney, rather than place it in Apollo Realty's escrow account.

   
   

4. The deal fell through. On November 19, 1979, Albert I. Caskill, Esquire, wrote Apollo Realty of Miami, on behalf of Mr. German:

   
   

   Demand is herewith made upon you for the $500 deposit being held in your escrow account in relation to the above-referenced transaction. We have been notified by the attorney for the purchasers, Lawrence M. Weiner, that his clients will not be going forward with the purchase, and, accordingly, their failure to complete the transaction pursuant to the contract constitutes a breach of the agreement.

   
   

   Please forward all deposit moneys to this office, same being made payable to the seller, John German. Petitioner's Exhibit No. 4.

   
   

   The house was off the market from June until the end of November. Mr. German never received any money on account of the transaction. (He did not even get the keys back.)

   
   

5. Respondent never deposited any money anywhere on account of this transaction, nor did he pay Mr. German any money directly. He testified that he instructed Allen Scherer, the other principal in Karma Properties, Inc., to deposit $500 with Lawrence Weiner, Esquire; that he read Mr. Caskill's letter of November 19, 1979, and passed it on to Mr. Scherer with instructions to "correct" (T. 36) the situation; but only learned that there was no money in escrow when he received the administrative complaint with which these proceedings began. In these particulars, respondent's testimony has not been credited. The parties stipulated that Mr. Weiner would testify, under oath, that he "never held or received any money in connection with the subject transaction."

   
   

6. Petitioner filed a proposed recommended order which has been reviewed and considered. The proposed findings of fact have been adopted in substance for the most part. Proposed findings of fact not adopted have been rejected as immaterial or as inconsistent with the weight of the evidence.

   
   

   CONCLUSIONS OF LAW

   
   

7. Petitioner is authorized to "suspend a license for a period not exceeding 10 years. . .revoke a license. . .impose an administrative fine. .

   .or. . .issue a reprimand," Section 475.25(1), Florida Statutes (1981), whenever petitioner establishes by clear and convincing evidence that a licensee has been "guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust," Section 475.25(1)(b), Florida Statutes (1981), or that he has "[f]ailed to account or deliver to any person. . .upon demand of the person entitled. . .any. . .thing of value," Section 475.25(1)(d), Florida Statutes (1981) or that he "[f]ailed, if a broker, to immediately place, upon receipt, any. . .deposit. . .entrusted to him by any person dealing with him as a broker in escrow. . . . Section 475.25(1)(k), Florida Statutes (1981).

8. In closing argument, counsel for petitioner asked that a reprimand be recommended for respondent. Even so, disciplinary licensing proceedings like the present case are potentially license revocation proceedings, since the penalty for the infraction alleged lies within the discretion of the disciplining authority, if allegations of misconduct are established at the hearing. Florida Real Estate Commission v. Webb, 367 So.2d 201 (Fla. 1979).

   
   

9. In a matter as grave as license revocation proceedings, the duty allegedly breached by the licensee must appear clearly from applicable statutes or rules or have a "substantial basis," Bowling v. Department of Insurance, 394 So.2d 165, 173 (Fla. 1st DCA 1981), in the evidence. License revocation proceedings have, indeed, been said to be "'penal' in nature." State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487, 491 (Fla. 1973); Kozerowitz v. Florida Real Estate Commission, 289 So.2d 391 (Fla. 1974); Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979) (reh. den. 1980).

   
   

10. At the formal hearing, petitioner had the burden to show by clear and convincing evidence that respondent committed the acts alleged in the administrative complaint. Walker v. State, 322 So.2d 612 (Fla. 3d DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 2d DCA 1966). See The Florida Bar v. Rayman, 238 So.2d 594 (Fla. 1970).

    
    

11. The evidence did not establish that respondent was guilty of violating Section 475.25(1)(d), Florida Statutes (1981). There was no showing that Mr. German was entitled to any money on account of the agreement embodied in Petitioner's Exhibit No. 2. Respondent was obligated by virtue of the agreement to buy Mr. German's house or suffer the consequences of a breach only if he obtained "an FHA commitment of not less than $35,000.00." Petitioner's Exhibit No. 2. Petitioner failed to prove that respondent did obtain such a commitment. The sales price of the house made obtaining a commitment for $35,000 unlikely. Petitioner did not show that respondent failed to deliver money "upon demand of the person entitled." Section 475.25(1)(d), Florida Statutes (1981) (emphasis supplied).

    
    

12. Petitioner proved and respondent admitted that he deposited nothing in escrow even though his written agreement with Mr. German, Petitioner's Exhibit No. 2, called for an escrow deposit and recited that the deposit had occurred; and even though he assured Mr. German orally that he would deposit $500 in escrow. Respondent's failure to keep his word showed him to be guilty of "false promises" within the meaning of Section 475.25(1)(b), Florida Statutes (1981).

    
    

13. Although Mr. German had listed his house with respondent on a prior occasion, the evidence left no doubt that he dealt with respondent as a principal, rather than as a broker, in the transaction which is the subject of the administrative complaint in the present case. Petitioner did not prove, therefore, that respondent violated Section 475.25(1)(k), Florida Statutes (1981) (failure to deposit funds "entrusted to him. . .as a broker in escrow") (emphasis supplied).

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That petitioner reprimand respondent.

DONE AND ENTERED this 11th day of May, 1982, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of May, 1982.

COPIES FURNISHED:

Joel S. Fass, Esquire 626 Northeast 124 Street

North Miami, Florida 33161

Adam Kurlander, Esquire 1820 Northeast 163 Street

North Miami Beach, Florida 33162

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Carlos B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32802

Frederick H. Wilsen, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002556

Orders for Case No: 81-002556