STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1190

)

HARRY ELLIS SAXTON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted in this matter on January 21, 1983, in Cocoa, Florida. The following appearances were entered: Tina Hipple, Orlando, Florida, appeared on behalf of the Petitioner, Florida Real Estate Commission; and Charles Holcomb and Charles Steinberg, Merritt Island, Florida, appeared on behalf of the Respondent, Harry Ellis Saxton.

The Petitioner issued an Administrative Complaint against the Respondent on or about February 24, 1982. Respondent requested a formal administrative hearing, and the matter was forwarded to the office of the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a hearing. The final hearing was originally scheduled to be conducted on August 6, 1982. Respondent filed a Notion for Continuance with which Petitioner concurred. The hearing was rescheduled to be conducted on October 13, 1982. The Respondent became seriously ill, and the hearing was continued and rescheduled to be conducted as set out above.

At the final hearing, the Petitioner called the following witnesses: Frank Kane, Jr., a real estate salesman; Delores Kane, a real estate broker; and Herbert A. Ross, a real estate broker and business consultant. The Respondent and his son, John Robert Saxton, a real estate broker, testified on the Respondent's behalf. Petitioner's Exhibits 1 through 14 and Respondent's Exhibits 1, 2, 4 through 7, 10, 14 through 16, 23, 25, and 26 were offered into evidence and received.

The parties have submitted post-hearing legal memoranda which include proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are expressly set out in the Findings of Fact and Conclusions of Law which follow. They have been otherwise rejected as not supported by the evidence, contrary to the better weight of the evidence, irrelevant to the issues, or legally erroneous.

ISSUES

The ultimate issues to be resolved in this proceeding are whether the Respondent has committed violations of provisions of law that regulate licensed

real estate salesmen and brokers and, if so, what disciplinary action should be taken. The Petitioner contends that Respondent unlawfully caused a document to be recorded in the Public Records of Brevard County in violation of the provisions of Section 475.42(1)(j), Florida Statutes. The Respondent concedes that the document that was filed in the Public Records of Brevard County should not have been filed, but denies that the Respondent intended the filing to be malicious, or for the purpose of collecting a commission or coerce the payment of money, or for any other unlawful purpose.

FINDINGS OF FACT

1. At all material times, the Respondent has been licensed by the Florida Real Estate Commission as a real estate broker. He is the secretary of a real estate brokerage corporation. The Respondent has been licensed to practice real estate in Florida since 1967. Prior to then, he practiced real estate in the State of Wisconsin. The Respondent is 68 years old.

   
   

2. During 1979 and 1980, the Respondent was an officer and director in First Trust Investment Corporation, a company organized to acquire real estate investments, principally for resale. The Respondent's real estate firm and the Respondent served as real estate brokers for First Trust Investment Corporation.

   
   

3. During October, 1979, Aria Investment Group owned an 18-acre tract of property on Croton Road in Melbourne, Florida. Delores Kane and Frank Kane were at that time real estate salesmen. They were two of the investors in the Aria Investment Group and owned a share of the property. The Kanes' real estate firm was acting as broker for the property.

   
   

4. Acting on behalf of First Trust Investment Corporation, the Respondent negotiated with the Kanes to purchase the property. On November 1, 1979, the Respondent, on behalf of First Trust, and the Kanes, acting on behalf of Aria, entered into a sales contract. Among the provisions of the contract was Paragraph 10, which provided:

   
   

   If contingencies described in "Exhibit D" attached hereto have been fully met by the parties and due notice given by each or either of them, as required therein, this transaction shall be closed at seller's attorney on September 1, 1980. . .

   
   

   Exhibit "D" to the contract provided that the contract was contingent upon the following:

   
   

   1. Seller shall provide to buyer at seller's sole expense, a current survey of subject lands within 30 days of execution of this contract of sale.

      
      

   2. Buyer shall apply at buyer's sole expense for and obtain approval from all appropriate government agencies of buyer's plan for construction of residential dwelling units on subject lands at a density of no less than six

      (6) units per gross acre.

      Under Paragraph 9 of the contract, these contingencies were to have been accomplished on or before February 29, 1980.

      
      

5. Respondent was not able to accomplish the contingencies by February 29, 1980. Early in March, Frank Kane contacted the Respondent and indicated that the sellers would need to have the contingencies waived and an additional deposit in order to keep the contract in force. In accordance with this request, the Respondent executed a letter which provided, as follows:

   
   

   This will confirm notice to you, as trustee for seller, from First Trust Investment Corp., as agent of buyer, that buyer has waived the requirement for satisfaction by February 29, 1980, of the contingencies described in paragraph number 9 and also in the Addendum thereto, of that certain buy-sell contract dated November 1, 1979, by and between Aria Investment Group, seller and First Trust Investment Corporation, or nominee, buyer.

   Buyer hereby agrees to continue its effort to satisfy aforesaid contingencies as soon as reasonably possible. All other terms and conditions of aforesaid contract shall remain in full force and effect as described therein.

   
   

   The parties disagree as to the meaning of this letter. The Kanes contend that the letter contains a complete waiver of the contingencies set out in Exhibit "D" to the contract. Respondent contends that the letter serves only to waive the requirement that the contingencies be met by February 29, 1980. The Respondent diligently sought local zoning and site plan approval and approval from other government agencies relating to sewer lines, etc. He was unsuccessful in obtaining all of these approvals by September 1, 1980, the closing date set out in the contract. Part of the reason that he was unsuccessful in obtaining all of the approvals was an error in the legal description of the property that had been provided by the Kanes.

   
   

6. The Kanes sought to enforce the contractual closing date. They met with the Respondent shortly before September 1, advised him that they desired to close and, by letter dated August 28, 1980, scheduled the closing for September 2, 1980. Respondent stated that he would not be at that closing, and he was not. At their meeting prior to September 2, the Respondent advised the Kanes that the buyer would be prepared to close when all of the contingencies had been met, and not before. He told them that if they sought to cancel the contract, he would tie up the property and might sue them. In a further effort to consummate the contract, the sellers, now through counsel, scheduled another closing to be conducted on October 24, 1980. Again contending that all of the contingencies had not been met, despite the buyer's best effort, Respondent did not attend the closing. The Kanes at that point considered the contract cancelled. Respondent, however, considered the contract still in effect. On approximately October 20, 1980, the Respondent met with his attorney, William H. Dixon. Dixon advised the Respondent that there was a prospect that the Kanes might seek to sell the property to another party. Accordingly, Dixon drafted a document styled "Memorandum of Contract for Sale and Purchase." The Memorandum described the property and provided that the contract between First Trust and Aria was in full force and effect. The Respondent executed the document. It was filed in the Public Records of Brevard County, apparently on attorney Dixon's advice. The Respondent considered the Memorandum a vehicle to prevent

   the sellers from entering into any other contract respecting the property. The document was executed on October 20, 1980, and filed in the Official Records on October 22.

   
   

7. The "Memorandum of Contract for Sale and Purchase" had the intended effect. The Kanes located another potential purchaser of the property and entered into a contract with that party. Because the Memorandum was in the Public Records, the new purchaser considered the sellers' title to be clouded and refused to execute the contract. Ultimately, the Kanes were successful in having the Memorandum removed from the Public Records of Brevard County. As of the date of the hearing, the property had still not been sold.

   
   

8. The Respondent testified that he withdrew from the transaction as the real estate broker for First Trust Investment Corporation prior to the time that he executed the "Memorandum of Contract for Sale and Purchase." He further testified that he had no intention of securing his real estate commission by executing the Memorandum and had no idea that the Memorandum was not properly filed in the Public Records of Brevard County. His testimony in this regard has been disregarded. Under the contract between First Trust and Aria, the Respondent was entitled to a real estate commission. The Respondent did nothing to eliminate his entitlement to such a commission. It was not until March, 1981, that he advised the Kanes that he was no longer participating in the transaction as a broker. Even if he told his lawyer that he intended to do that in October, 1980, it is apparent that he took no steps to accomplish it until March, 1981. The Respondent's testimony that he did not know it was improper to record a "Memorandum of Contract for Sale" in the Official Records unless it was properly executed by the seller is not credible given the Respondent's long experience in the real estate field. If the Respondent did not know that it was improper to record such a document, he should have known it.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this proceeding. Sections 120.57(1), 120.60, Florida Statutes.

   
   

10. Section 475.42(1)(j), Florida Statutes, provides:

    
    

    No broker or salesman shall place, or cause to be placed, upon the public records of any county any contract affidavit, or other writing which purports to affect the title of, or encumber, any real property if the same is known to him to be false, void, or not authorized to be placed of record, or not executed in the form entitlement to be recorded, or the execution or recording whereof has not been authorized by the owner of the property, maliciously or for the purpose of collecting a commission, or to coerce the payment of money to the broker or salesman or other person, or for any unlawful purpose.

    
    

    By executing and causing a "Memorandum of Contract for Sale and Purchase" to be filed in the Public Records of Brevard County, the Respondent violated the provisions of Section 475.42(1)(j). It appears that his purposes for executing

    and recording the document were to secure the benefits of the contract for sale for First Trust Investment Corporation, of which he was a part. Furthermore, it is apparent that the Respondent was entitled to a commission if the transaction closed and obtaining that commission was presumptively a part of his motivation. See: Section 475.28(1), Florida Statutes. The filing of the "Memorandum of Contract for Sale and Purchase" is clearly contrary to the provisions of Section 696.01, Florida Statutes, which provides:

    
    

    No contract, agreement, or other instrument purporting to contain an agreement to purchase or sell real estate shall be recorded in the public records of any county in the State, unless such contract, agreement, or other instrument is acknowledged by the vendor in the manner provided by law for the acknowledgment of deeds; and when there is no acknowledgment on the part of the vendor, the recording officers in various counties of the State shall refuse to accept such instruments for record.

    
    

    The Respondent's execution of the Memorandum clearly had an unlawful purpose, that being to improperly place a cloud on the title to real property.

    
    

11. Section 475.25(1)(a), Florida Statutes, provides that the Real Estate Commission may suspend or revoke a real estate license, impose an administrative fine, or reprimand a licensee if the licensee violates the provisions of Section

475.42. The Respondent's actions justify a suspension of his real estate broker's license.

RECOMMENDED ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby,

RECOMMENDED:

That the Florida Real Estate Commission enter a final order finding the Respondent guilty of violating the provisions of Section 475.42(1)(j) as alleged in the Amended Administrative Complaint and suspending the Respondent's real estate broker's license for a period of six months.

RECOMMENDED this 5th day of April, 1983, in Tallahassee, Florida.

G STEVEN PFEIFFER

Hearing Officer

Division of Administrative Hearings Department of Administration

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 1983.

COPIES FURNISHED:

Tina Hipple, Esquire Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

Charles Holcomb, Esquire Charles R. Steinberg, Esquire Holcomb, Theriac, Steinberg & Amari

261 Merritt Square First Federal Building

Merritt Island, Florida 32952

Mr. Fred Roche Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Harold Huff Executive Director

Florida Real Estate Commission Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

William M. Furlow, Esquire Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

Docket for Case No: 82-001190

Orders for Case No: 82-001190