STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT ) OF PROFESSIONAL REGULATION, ) FLORIDA REAL ESTATE COMMISSION )

(formerly Board of Real Estate), )

)

Petitioner, )

)

vs. ) CASE NO. 82-203

) DPR NO. 009005 GEORGE H. LOWE and LOWE REAL )

ESTATE, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. This hearing was conducted on February 21, 1983, in Ft. Myers, Florida. Petitioner, in the person of counsel, has offered a proposed recommended order for consideration and that proposal has been reviewed prior to the entry of this Recommended Order. To the extent that the proposal is consistent with the Recommended Order, it has been utilized. To the extent that the proposal is inconsistent, it is rejected. A transcript of the hearing was filed with the Division of Administrative Hearings on March 8, 1983, and that transcript has been reviewed prior to the entry of this Recommended Order.

APPEARANCES

For Petitioner: Bruce D. Lamb, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: George H. Lowe, Pro Se

Post Office Box 1387

Bonita Springs, Florida 33923 ISSUES

The issues presented in this case are the product of an administrative complaint brought by the Petitioner against Respondents. The Respondents are charged with violations of Chapter 21V-14.11, Florida Administrative Code; Subsection 475.42(1)(e), Florida Statutes; Subsection 475.25(1)(a), Florida Statutes; Subsection 475.25(1)(d), Florida Statutes; and Subsection 475.25 (1)(b), Florida Statutes. In particular, it is alleged that the Respondents utilized deposit monies placed with them in their capacity as real estate license holders, without first obtaining the written agreement of the individual who had placed that deposit with Respondents. It is further alleged that Respondents failed to deliver that deposit on demand and utilized the deposit money, and by that use are guilty of fraud, misrepresentation, concealment,

false promises, dishonest dealing, culpable negligence or breach of trust in a business transaction.

FINDINGS OF FACT

1. In keeping with Chapter 455, Florida Statutes, and the aforementioned provisions of Chapter 475, Florida Statutes, the State of Florida, Department of Professional Regulation, brought an administrative complaint against Respondents. Respondents disputed the factual allegations set forth in the administrative complaint, leading to a Subsection 120.57(1), Florida Statutes, hearing and the ensuing Recommended Order.

   
   

2. At all times relevant to the inquiry, Respondent, George H. Lowe, has held a real estate broker's license, No. 0053500, issued by the Florida Real Estate Commission. Respondent, Lowe Real Estate, Inc., a corporation licensed to conduct real estate business in Florida, has been the holder of License No. 0208653 at all pertinent times in this case. Respondent, George H. Lowe, has been the active firm member of Lowe Real Estate, Inc. during this time frame.

   
   

3. In February, 1980, Norman C. Strong contacted Lowe Real Estate, Inc., in the person of George Lowe, for purposes of having that firm and its active broker assist in the possible purchase of real estate in Florida. At that time, and at all pertinent times, Lowe Real Estate, Inc. and George R. Lowe have been in the business of selling real estate in Florida, from an office located in Florida. During these contacts, Norman Strong deposited $10,000 to be paid to the escrow account of Lowe Real Estate, Inc., pending the purchase of certain real estate. This check was issued to Lowe Real Estate, Inc. on February 25, 1980. The check in question states on its face that the money is to be placed in the escrow account of the Respondent real estate corporation. By correspondence of February 25, 1980, the Strong deposit money was acknowledged through George Lowe acting for his real estate firm. In that correspondence, he states that if an agreement was not reached within 30 days, that the deposit money would be refunded upon demand. A copy of this letter may be found as Petitioner's Exhibit No. 6 to Petitioner's Exhibit No. 2. The money was given to George H. Lowe. That real property is described in Petitioner's Exhibit 2, a deposition of Norman C. Strong, at Exhibit 2 to the deposition. The attached Exhibit 2 is a copy of the offer made for the purchase of the property and refers to the $10,000 deposit money which had been placed with Lowe Real Estate. It mentions that the deposit shall be held in escrow. In effect, the $10,000 was an earnest money deposit.

   
   

4. This offer, by contract, which is the attached Exhibit 2 by Petitioner, was executed by the buyer, Strong, through George Lowe on March 21, 1980. The contract indicates that the offer should be favorably responded to by the seller on or before April 10, 1980. In the absence of such execution, the deposit money would be, at the option of the buyer, Strong, returned to him and the offer would be null and void thereafter. The contract also states that the transaction shall be closed and the deed and other closing papers delivered on May 15, 1980, unless extended.

   
   

5. The contract was not accepted on or before April 10, 1980. As a consequence, Norman Strong requested the return of his escrow deposit money by telephone calls.

   
   

6. The first letter of demand for the return of the deposit money occurred on July 1, 1980, subsequent to the expiration date of the contract offer and the date established for closing. A copy of this correspondence may be found as

   Petitioner's Exhibit No. 3, attachment to Petitioner's Exhibit No. 2. It reaffirms the repeated efforts that have been made to retrieve the $10,000 earnest money deposit prior to the time of the preparation of the correspondence and it demonstrates that Lowe Real Estate, Inc. had received that correspondence, there being attached a receipt for certified mail. Certified mail was the basis of transmittal of this correspondence.

   
   

7. Norman Strong employed counsel to assist in the recovery of the

   $10,000, and his attorneys made demand for the return of the $10,000 security deposit on July 30, 1980, by correspondence forwarded through certified mail and received by Respondent real estate corporation. Having failed to receive satisfaction on the request for return of the security deposit, a suit was filed in the Circuit Court for the Twentieth Judicial Circuit, in and for Lee County, Florida, leading to a final judgment in favor of Strong, as trustee against George H. Lowe and Lowe Real Estate, Inc. A copy of that final judgment may be found as Petitioner's Exhibit 5 to Petitioner's Exhibit 2. The suit was filed in October, 1980, and the final judgment entered in April, 1981.

   Notwithstanding this final judgment, Respondents have not paid the $10,000 judgment or in any other fashion returned the $10,000 deposit money. Nor has there been any other agreement either in writing or otherwise which would allow that $10,000 deposit to be utilized by Respondents, other than in the fashion intended by the contract offer previously described.

   
   

8. In view of the circumstances presented, it is determined that Respondents used the deposit money for purposes not intended by the purchaser, Norman Strong.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action, in keeping with Subsection 120.57(1), Florida Statutes.

   
   

10. Rule 21V-14.11, Florida Administrative Code, states:

    
    

    No broker who receives a deposit shall have any right to or lien upon said deposit, except upon the written agreement or order of the depositor so long as the depositor has sole control of said deposit, nor until the transaction involved has been completely closed, and no person has any claim thereto except the party ultimately to receive the same, in which case the broker may deduct his agreed commission therefrom, unless the amount or time of payment thereof is disputed. . .

    
    

    Respondents, in the face of this pronouncement, had no right to the utilization of the deposit money. Nonetheless, Respondents exercised a proprietary interest in the deposit money, in violation of the rule, which is a violation of Subsection 475.42(1)(e), Florida Statutes, and in turn, a violation of Subsection 475.25(1)(a), Florida Statutes. Moreover, the rule's offense is a violation of Subsection 455.227(1)(b), Florida Statutes and, in turn, a violation of Subsection 475.25(1)(a), Florida Statutes. These violations discussed pertain to allegations made in Count I.

11. By allegations announced in Count II, Respondents are said to have violated Subsection 475.25(1)(d), Florida Statutes, for failure to deliver the deposit money upon appropriate demand. This violation is established through the facts found.

    
    

12. Count III accuses Respondents of utilizing the $10,000 deposit without prior written agreement of Strong and by that action, being guilty of fraud, misrepresentation, concealment, false promises, dishonest dealing, culpable negligence, or breach of trust in a business transaction, as set forth in Subsection 475.25(1)(b), Florida Statutes. The facts found in this case establish the violation as alleged.

    
    

13. For the violations concluded, Respondents are subject to the disciplinary action set forth in Subsection 475.25(1), Florida Statutes. Having considered the facts in this case, and the conclusions of law reached, it is

RECOMMENDED:

That a final order be entered which revokes Respondent George H. Lowe's real estate broker's license and revokes the corporate real estate license of Lowe Real Estate, Inc.

DONE and ENTERED this 15th day of April, 1983, in Tallahassee, Florida.

CHARLES C. ADAMS

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 15th day of April, 1983.

COPIES FURNISHED:

Bruce D. Lamb, Esquire Department of professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. George H. Lowe Post Office Box 1387

Bonita Springs, Florida 33923

Mr. Fred Roche Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Harold Huff Executive Director

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Docket for Case No: 82-000203

Orders for Case No: 82-000203