STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF THE PROFESSIONAL ) REGULATION, BOARD OF REAL )

ESTATE (Now Florida Real )

Estate Commission), )

)

Petitioner, )

)

vs. ) CASE NO. 81-2738

) WALTON ASSOCIATES, INC. and ) SUSAN ELLEN WALTON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly appointed Hearing Officer, P. Michael Ruff, held a public hearing in this case on August 16, 1982, in Orlando, Florida.

APPEARANCES

For Petitioner: John G. DeLancett, Esquire and

James R. Mitchell, Esquire

801 North Magnolia Avenue, Suite 402 Post Office Box 6171-C

Orlando, Florida 32853

For Respondent: Edward L. Cook, Esquire

1885 Lee Road

Winter Park, Florida 32789

This cause came on to be heard on an Amended Administrative Complaint filed November 13, 1981, wherein the Petitioner charges that the Respondent brokers were engaged in furnishing rental information to prospective tenants in return for a fee paid in advance by such prospective tenants; that on or about October 23, 1979, one Richard Turner, a prospective tenant, entered into a contract with the Respondents whereby for a payment of $40.00 in fee the Respondents would supply Turner with rental information and a list of available rentals. It is alleged that some of the rental information was not current nor accurate and that some of the properties were not available as rentals. It is further charged that, having not succeeded in obtaining a rental property to meet his requirements as set forth in their contract, Turner made demand on Respondents within thirty (30) days of the contract for a refund of his deposit. The Respondents refused to refund the $40.00 advance fee. Finally, the Petitioner alleges that because of the failure to make refund to Richard Turner in compliance with the provisions of Subsection 475.453(1), Florida Statutes, the Respondents are guilty of violating that subsection and by reason of the acts charged are guilty of dishonest dealing by trick, scheme or device or breach of trust in a business transaction, and further guilty of failing to account for or

deliver to Richard Turner monies due and payable to him upon demand, which monies the Respondents are not at law or equity entitled to retain. These acts are alleged to constitute a violation of Subsection 475.25(1)(b) and (d), Florida Statutes.

At the hearing the Petitioner presented three witnesses and 11 exhibits; all of Petitioner's exhibits were admitted. The Respondents presented one witness, the Respondent, Susan Walton, and presented Exhibits A and B, both of which were admitted into evidence. At the conclusion of the hearing, the parties sought the benefit of a transcript of the proceedings and were afforded leave to submit proposed findings of fact and conclusions of law and a proposed recommended order, which have been considered in the preparation of this Recommended Order. To the extent that the proposed findings of fact and conclusions of law are not included and treated in this Recommended Order, the proposed findings of fact and conclusions of law are deemed irrelevant, immaterial or otherwise not supported by the evidence of record. In conjunction with the extended briefing schedule, the parties waived the requirement that the recommended order be issued within 30 days following the filing of the transcript.

The issues before the undersigned for resolution concern whether or not the Respondents are guilty of dishonest dealing by trick, scheme or device or breach of trust in a business transaction for failure to refund a rental fee to Richard Turner and, secondly, whether or not the Respondents are guilty of failing to account to Richard Turner for monies due and payable to him upon demand which are not the property of the Respondents and which the Respondents are not in law or equity entitled to retain.

FINDINGS OF FACT

1. The Respondent, Susan Ellen Walton, was a registered and licensed real estate broker at all times material hereto. The Respondent, Walton Associates, Inc., was a licensed real estate broker at all times material hereto. The Respondents have been issued licenses numbered 0092944 and 0111791, respectively.

   
   

2. The Petitioner is an agency of the State of Florida charged with regulating the licensure status and practice of real estate brokers, broker salesmen and salesmen in the State of Florida.

   
   

3. In October of 1979, Richard E. Turner, Jr. was moving from Gainesville, Florida, to the Daytona Beach, Florida, area. Mr. Turner took two days in October, 1979, and went to Daytona Beach to look for some rentals. He was unable to find any suitable housing through his own efforts so he went to the Respondents' rental agency asking for information regarding residential rental property. Mr. Turner ultimately entered into a written agreement with the Respondents whereby the Respondents would supply him with a list of rental homes that were within his stated financial means. In return for this service, Mr. Turner paid a $40.00 fee to the Respondents. The Respondents supplied Mr. Turner with a list of approximately four homes in the $175.00 to $225.00 per month rental price range. These homes proved to be unsuitable to live in or, on the day in question, were already rented. Mr. Turner therefore returned to the Respondents' office to obtain a second list of homes. He encountered the same

   problem with the second list of homes supplied him by the Respondents. Mr. Turner then went back to the Respondents' office the third time and was given three or four more houses to survey. On this list, one listing in particular was a house located at 118 Rio Way in Riviera Oaks Subdivision. The rental price stated for that house was approximately $375.00 per month.

   
   

4. Mr. Turner made an extensive search to look for 118 Rio Way, but was unable to find the address. He drove all the way around Rio Way and, being unable to locate 118, went to the Riviera Oaks Subdivision sales office on Calle Grande, which was the street on the other side of the Rio Way circle. Riviera Oaks is a Tompkins Development subdivision. Mr. Turner stopped at the Tompkins Development office and talked to a saleswoman, Debbie Snowden, to see if there was a 118 Rio Way address in the subdivision. Ms. Snowden showed him a map of the subdivision in her office which revealed that there was not a 118 Rio Way address listed.

   
   

5. Being therefore unable to locate a 118 Rio Way address and rental house, Mr. Turner returned to the Respondents' office. The person who had been helping him in the Respondents' office indicated that the card in their file describing the rental property supposedly at 118 Rio Way showed that a Mr. Frank Kenney was the individual to contact concerning information on that residence. Mr. Turner attempted to reach Frank Kenney but was unable to do so. He returned to Riviera Oaks to see if he could locate Frank Kenney in that subdivision. He went to the sales office and was told by Ms. Snowden that she knew Mr. Kenney, who had formerly worked at her office and, in fact, she now held his former job. With Ms. Snowden's help, Mr. Turner attempted to locate Mr. Kenney once again and was unable to do so. On this occasion, Ms. Snowden attempted to sell Mr. Turner a house and he told her that he would consider it.

   
   

6. That same evening, Mr. Turner continued his attempt to find Frank Kenney and was unable to do so. Turner was becoming irritated regarding finding any available rental property. He accordingly returned to see Ms. Snowden at the Riviera Oaks Subdivision and had her show him and his wife a house for possible purchase. They ultimately signed a Contract of Sale for a residence located at 108 Rio Way in the Riviera Oaks Subdivision. That contract was dated October 4, 1979. The Turners gave the Tompkins Development Company a $100.00 deposit on the purchase of this house.

   
   

7. After signing the Contract for Sale, the Turners contacted the Respondents about receiving a refund on the rental fee arrangement. Mr. Turner filled out the necessary form in order to obtain the refund of his $40.00. This form was sent to the Respondents and the Respondents were otherwise informed by Mr. Turner that he wished his $40.00 refunded within 30 days from the date Mr. Turner first contacted the Respondents regarding obtaining information about rental property. Mr. Turner subsequently received a speed message bearing the date November 30, 1979, from the Respondents stating that his request for refund had been refused. The speed message was signed by S. Walton of Walton Associates, Inc. (see Petitioner's Exhibit 10). Before denying a refund to the Turners, the Respondent, Walton, contacted Debbie Snowden at Riviera Oaks Subdivision office and asked her if the Turners were indeed renting a house from her, and she responded that they were not renting a house, but were temporarily leasing a house at 108 Rio Way until they could effect the closing of a loan so they could consummate the purchase of that same house.

8. Prior to the execution of the contract, Mr. Turner had told Ms. Snowden that they needed a place to live until the closing of the conveyance of the house and it was agreed by all parties that they could move into the house while awaiting approval on their loan and the subsequent closing, provided the Turners signed a Lease and Occupancy Agreement. The Lease and Occupancy Agreement was required because on past occasions people had put up a deposit of $100.00 on a house and stayed in that house for several months and then left without paying any further for the use of the house. The Lease Occupancy Agreement from Tompkins Development is not a normal procedure, but the general manager for Tompkins Development, Pat Gallo, occasionally lets people move into homes under a Lease and Occupancy Agreement pending closing on that same home for which they have already contracted to purchase. Under the Lease and Occupancy Agreement in question, the Turners were required to pay the costs of the construction loan, which was $10.48 per day. Further, Tompkins Development was shown to be a sales company, dealing only in sales or residential real estate and not engaging in rental of rental property management at all. The only way Tompkins Development would have leased a house such as this one to someone is if the parties seeking to lease the house were under a contract to purchase that house. Tompkins Development simply did not make a practice of advertising homes for rental and did not seek to service individual families coming to them looking for rental housing.

   
   

9. After signing the Contract of Sale for the house on October 24, 1979, the Turners moved into the house at 108 Rio Way. One day after they moved into that house, a rain storm flooded the street and so they approached Ms. Snowden regarding that problem and advised her that they did not then wish to buy the house if it was going to be subject to periodic flooding after each heavy rain. After some negotiation, they then signed the contract for 1018 Calle Grande, but this contract was apparently not accepted by the home office of Tompkins Development. The Turners ultimately entered into a contract on March 29, 1980, for a home located at 112 Camino Circle. This contract was subsequently renegotiated and re-executed on May 12, 1980, due to a change in the type of FHA mortgage loan the Turners were obtaining. On July 31, 1980, the Turners closed and completed the conveyance on the house located at 112 Camino Circle. At no time during this series of events did the Turners nor Ms. Snowden nor Tompkins Development mutually agree or understand that the contractural arrangement they had undertaken was for a rental of the house at 108 Rio Way, rather it was, as described above, merely a convenient method whereby the Turners could pay the cost of the construction loan pending the closing of the permanent financing on the dwelling in return for living in it as a convenience to them until time for closing.

   
   

10. It was established that prior to October, 1979, neither Debbie Snowden, the saleswoman who negotiated the sale of the residence at 108 Rio Way with the Turners, nor the previous salesman, Frank Kenney, had ever heard of the Respondents, nor did Tompkins Development have a non-exclusive rental agreement (or any other kind) with any rental agency in the Daytona Beach area, including Respondents.

    
    

11. The Respondents' real estate brokers licenses have previously been suspended on one occasion in December of 1981 by the Board of Real Estate, now the Florida Real Estate Commission. Their licenses were suspended for a period of 120 days, with 30 days of that penalty period being suspended upon the

    Respondent, Susan Ellen Walton, making full restitution of a $40.00 rental fee to one Narenda H. Patel. That suspension stemmed from the Respondents' failure to make a refund of a $40.00 rental fee upon demand by Narenda H. Patel within

    30 days of the rental fee agreement after Patel was unable to secure a rental using the Respondents' rental fee service.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action. Section 120.57(1), Florida Statutes (1979).

    
    

13. Subsection 475.453(1), Florida Statutes, provides as follows:

    
    

    1. Each broker or salesman who attempts

       to negotiate a rental, or who furnishes rental information to a prospective tenant, for a fee paid by the prospective tenant with a contract or receipt, which contract or receipt contains a provision for the repayment of any amount over 25 percent of the fee to the prospective tenant if the prospective tenant does not ob tain a rental. If the rental information pro

       vided by the broker or salesman to a prospective tenant is not current or accurate in any material respect, the full fee shall be repaid to the prospective tenant upon demand. A demand from the prospective tenant for the return of the

       fee, or any part thereof, shall be made within

       30 days following the day on which the real estate broker or salesman has contracted to perform services to the prospective tenant. The contract or receipt shall also conform to the guidelines adopted by the board in order to effect disclosure of material infor mation regarding the service to be provided to the prospective tenant.

       
       

14. Subsection 475.25(1)(d), Florida Statutes, provides as follows:

    
    

    Failed to account or deliver to any person including the licensee under this chapter, 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, any personal property such as money, fund, deposit check, draft . . . 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. . . .

    
    

15. There is no question that the unrefuted evidence in this record establishes that the Respondents violated the above authority in that the Respondents, by and through the acts of Susan Ellen Walton, the active broker, supplied Mr. Turner with several lists of rental property which were fraught with inaccurate property descriptions and, in some cases, listed rental

    residences which were not available as rentals. It is also established by the evidence in this record that the house at 108 Rio Way was not occupied by Mr. Turner and his wife as a rental property but, rather, they paid a per diem charge representing the interest cost of the construction loan attributable to that house pending closing of permanent financing and conveyance of title to them. The arrangement between the Turners and Tompkins Development regarding the house at 108 Rio Way contains none of the indicia of a rental arrangement other than the fact that they happened to pay a monthly lease charge based on a per diem rate of $10.48 per day, which was established to be the exact charge of the construction loan costs prorated on a daily basis. Even if it were construed to be a bona fide rental arrangement, rather than occupancy under a lease pending closing of the sale, such a rental arrangement was not obtained through any services of the Respondents; rather, Mr. Turner attempted to find a residence he was referred to by the Respondent which simply did not exist and he happened to enter the office of Tompkins Development and conferred with Debbie Snowden in an attempt to find the address, 118 Rio Way. Through that happenstance he ultimately found the house he first occupied under the lease arrangement with Tompkins, at 108 Rio Way. There was simply no agreement between Tompkins Development and the Respondents whereby the Respondents would obtain rental tenants for Tompkins Development, which evidence is especially borne out by the uncontroverted fact that Tompkins Development was not even in the residential rental business at all and none of the residences occupied before or after the flooding problem discussed above were obtained by the Turners through any services afforded by the Respondents.

    
    

16. Accordingly, it must be concluded that the uncontroverted evidence in this record clearly establishes that the Respondents have violated Section 475.453(1), delineated above, in failing to timely return the subject $40.00 fee, for which timely demand was made, since Mr. Turner did not obtain a rental and since the information regarding residential rental property was not current and accurate in any material respect. Further, it was established that the Respondents thus failed to account or deliver to Richard Turner the monies due him and payable to him upon his demand or within the time agreed to between the parties. The $40.00 retained by the Respondents was not the property of the Respondents and that they are not in law or equity entitled to retain it under the circumstances of this case.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore

RECOMMENDED:

That the Respondents, Susan Ellen Walton and Walton Associates, Inc., have their licensure status suspended for a period of ninety (90) days, with thirty

(30) days of that period suspended provided that the Respondent, Susan Ellen Walton, makes full restitution of the $40.00 due and owing to Richard Turner within ten (10) days of the entry of the Final Order herein.

DONE and ENTERED this 8th day of December, 1982, in Tallahassee, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of December, 1982.

COPIES FURNISHED:

John G. DeLancett, Esquire and

James R. Mitchell, Esquire

801 North Magnolia Avenue, Suite 402 Post Office Box 6171-C

Orlando, Florida 32853

Edward L. Cook, Esquire 1885 Lee Road

Winter Park, Florida 32789

William M. Furlow, Esquire Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Docket for Case No: 81-002738

Orders for Case No: 81-002738