STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-2267

)

DIANE M. KLEIN )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Fort Lauderdale, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on February 10, 1984. The Division of Administrative Hearings received a transcript of proceedings on March 9, 1984. Nobody appeared on behalf of respondent. Petitioner was represented by counsel:

Fred Langford, Esquire Post Office Box 1900

400 West Robinson Street Orlando, Florida 32802

By administrative complaint dated April 28, 1983, petitioner alleged that respondent, licensed at all pertinent times as a real estate broker, "obtained a sales contract dated September 22, 1982" together with "a $5,000.00 earnest money deposit" but that the "transaction failed to close for the reason the purchaser was unable to obtain suitable financing which was a contingency of the sales contract"; that the purchaser demanded return of the earnest money and that the seller made no claim on the money, but that respondent nevertheless "failed, refused and neglected to return the deposit" and instead "utilized said deposit for her own use and benefit or for some other use...without the knowledge and consent of the purchaser and seller"; and that respondent "is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and breach of trust in a business transaction, in violation of Subsection 475.25(1)(a), Florida Statutes" and of "failure to account and deliver a deposit in violation of Subsection 475.25(1)(d), Florida Statutes" and of "failure to place and maintain a deposit entrusted to Respondent in her capacity as a real estate broker in a proper escrow or trust account until disbursement thereof was properly authorized all in violation of Subsection 475.25(1)(k), Florida Statutes."

ISSUE

Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?

FINDINGS OF FACT

1. Respondent Diane M. Klein, nee Diane Marie Ballantyne, has been licensed by petitioner as a real estate broker at all pertinent times, holding license No. 0314120. Petitioner's Exhibit No. 6.

   
   

2. On September 22, 1983, Winfield F. Imel signed a contract for sale and purchase of Arrowhead County Club, which is in Broward County, Florida, on conditions including the following:

   
   

   New financing mortgage: this agreement is contingent upon the buyers being able to obtain a new first mortgage. Buyers agree to immediately apply for said mortgage and to pay mortgage loan costs in obtaining same. Broker to receive written mortgage commitment on or before

   20 days after acceptance of contract or contract is null and void.

   
   

   Petitioner's Exhibit No. 1.

   
   

3. In this transaction, Ms. Klein represented the owner of the property as a real estate broker. The total purchase price was $1,950,000.00. The seller accepted the offer and executed the contract on September 23, 1982.

   
   

4. On September 27, 1982, Mr. Imel signed a check in favor of respondent Klein indicating "ESCROW" and "re golf-COURSE." Petitioner's Exhibit No. 2. He delivered the check to Ms. Klein as earnest money under the contract he had signed on September 22, 1982. Ms. Klein deposited the check to her escrow account, No. 0002502307 at Florida National Bank, on September 28, 1982. Petitioner's Exhibit No. 5.

   
   

5. Mr. Imel tried to obtain money, to be secured by a new first mortgage, from more than one lender. He approached "a group in Atlanta, IVA," (T.8), Mr. Frank Porter in Phoenix, and Vicars and Associates in Maryland, as well as local banks, including First Fidelity Mortgage Corporation in Palm Beach. Dexter B. Wakefield of First Fidelity Mortgage Corporation advised Mr. Imel in November of 1982 that First Fidelity's efforts to "broker a loan on his behalf for Arrowhead Country Club" (T. 9) had not succeeded. Petitioner's Exhibit No. 4. Mr. Imel sought money from First Fidelity not only in order to purchase the property, but also for "refurbishing." Petitioned's Exhibit No. 4. Be never succeeded in obtaining financing for the acquisition and wrote respondent to that effect, requesting "a full and immediate refund of my deposit in the amount of

   $5,000.00," on December 7, 1982. Petitioner's Exhibit No. 3.

   
   

6. Respondent expressly declined to refund the deposit and has never paid Mr. Imel any of the money. On October 19, 1982, respondent had written a check for $5,000.00 against her escrow account and in favor of "D.K. Operating Acc't." The check was paid October 20, 1982. Petitioner's Exhibit No. 5.

   
   

7. The record does not reveal whether the seller ever asked for or received any money in connection with this transaction. The seller had "agree[d] to pay [respondent] as a fee, the sum of Ninety-Seven thousand and five hundred dollars ($97,500.00) or one-half of the deposits in case same is forfeited by the Buyer Petitioner's Exhibit No. 1.

   CONCLUSIONS OF LAW

   
   

8. Petitioner is authorized to "...suspend a license for a period not exceeding 10 years,...revoke a license,...impose an administrative fine not to exceed $1,000 for each count or separate offense, or...issue a reprimand, if it finds that the licensee...has," Section 475.25(1), Florida Statutes (1983)

   
   

   (b) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction

   * * *

   has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a

   real estate transaction; has aided, assisted, or conspired with any other person engaged

   in any such misconduct and in furtherance thereof; or

   * * *

   (d) Failed to account or deliver to any person,...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,

   or other...thing of value,...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

   * * *

   (k) Has failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to him by any

   person dealing with him as a broker in escrow with a title company, banking institution,

   or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by him with some bank or savings

   and loan association located and doing business in this state, wherein the funds shall be

   kept until disbursement thereof is properly authorized;....

   
   

   Petitioner has not charged respondent with a violation of the requirements that Section 475.25(1)(d), Florida Statutes (1983), lays down for brokers who are in doubt or receive conflicting demands regarding property in escrow.

   
   

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. Disciplinary licensing proceedings like the present case are potentially license revocation

   proceedings, even in the absence of a recommendation of revocation, since the penalty for the infraction alleged lies within the discretion of the disciplining authority, if allegations of misconduct are established at a hearing. Florida Real Estate Commission v. Webb, 367 So.2d 201 (Fla. 1979). License revocation proceedings have 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. 198D)

   
   

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. It is not clear from this record whether Mr. Imel was in default under his contract to purchase Arrowhead Country Club. Whether he made efforts in good faith to secure a new first mortgage within 20 days of September 23, 1982 (as opposed to trying at some later time) was not shown. Nor was it clear from the record whether he ever sought to obtain purchase money independently of obtaining money for refurbishing the property. The evidence thus fails to establish that Mr. Imel, the only person shown to have made a demand on respondent for money, was "the person entitled to such....delivery." Section 475.25(1)(d) Florida Statutes (1983). The evidence was also insufficient to prove fraud, misrepresentation, concealment, false promises, false pretenses or dishonest dealing.

    
    

12. Petitioner did not prove its allegation that the "seller made no claim on the deposit and....did not object to the deposit being returned. But the evidence did show that respondent disbursed the entire $5,000.00 from her escrow account into her operating account. Perhaps this was simple negligence. As far as the record shows, she may have received reliable information that Mr. Imel had made no effort to secure financing within the agreed time, and, for that reason, have written a check for $2500.00 against her operating account in favor of the seller the same day she deposited the $5,000.00 from her trust account into the operating account.

    
    

13. Even if she did not appropriate the entire $5,000.00 deposit to her own use, however, she violated "a duty imposed by ....law or by the terms of a listing contract," Section 475.25(1)(b), Florida Statutes (1983), and the requirements of Section 475.25(1)(k), Florida Statutes (1983), when she transferred the whole deposit from the trust account to her operating account, when, at most, only half the money was hers.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That petitioner suspend respondent's license for ninety (90) days.

DONE and ENTERED this 11th day of May, 1984, in Tallahassee, Florida.

ROBERT T. BENTON II

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 11th day of May, 1984.

COPIES FURNISHED:

Fred Langford, Esquire

Department of Professional Regulation Florida Real Estate Commission

400 West Robinson Street Orlando, Florida 32801

Diane M. Klein

Post Office Box 7193 Ft. Lauderdale, Florida

Harold Huff, Executive Director Department of Professional Regulation Florida Real Estate Commission

400 West Robinson Street Orlando, Florida 32801

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENTAL OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION,

Petitioner,

vs. CASE NO. 0031645

DOAH NO. 83-2267

DIANE M. KLEIN

Respondent.

/

FINAL ORDER

The Florida Real Estate Commission heard this case on June 19, 1984 to issue a Final Order.

Hearing Officer Robert T. Benton II of the Division of Administrative Hearings presided over a formal hearing on February 10, 1984. On May 11, 1984, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

However, as to the Recommendation, after a complete review of the record the Florida Real Estate Commission hereby ORDERS that the Respondent's real estate license be revoked.

This Order shall be effective thirty (30) days from the date of filing with the Clerk of the Department of Professional Regulation.

DONE AND ORDERED this 19th day of June 1984 in Orlando, Florida.

BRIAN J. LADELL, Chairman Florida Real Estate Commission

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was sent by

U.S. Mail to: Diane N. Klein P O Box 7193, Fort Lauderdale, Florida 33338; to Fred Langford, Staff Attorney, Dept. of Professional Regulation, P.O. Box 1900, Orlando, Florida 32802; and to Hearing Officer Robert T. Benton 11, Division of Administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida 32301, this 6th day of July, 1984.

HAROLD R. HUFF, Director Department of Professional

Regulation

Division of Real Estate Post Office Box 1900 Orlando, Florida 32802

Docket for Case No: 83-002267

Orders for Case No: 83-002267