STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA )

REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-3255

)

PAUL P. JACKSON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on March 19, 1984, at Tampa, Florida

APPEARANCES

For Petitioner: Tina Hipple, Esquire

Post Office Box 1900 Orlando, Florida 32802

For Respondent: Paul P. Jackson, pro se

7211 North Dale Mabry Street, Suite 200 Tampa, Florida 33614

By Administrative Complaint dated September 8, 1983, the Department of Professional Regulation, Division of Real Estate, Petitioner, seeks to revoke, suspend, or otherwise discipline the license of Paul P. Jackson, Respondent, as a real estate broker. As grounds therefor it is alleged that Respondent is guilty of fraud, misrepresentation, and dishonest dealing in a real estate transaction in which he acted as broker, that he failed to account for and deliver funds coming into his possession to the party entitled thereto, and that he failed to place and keep deposits received in an escrow account until disbursement thereof is authorized.

At the hearing petitioner called three witnesses, including Respondent, Respondent presented additional testimony as cross-examination, and 15 exhibits were admitted into evidence.

No proposed findings were submitted by the parties. Conflicting testimony has been resolved in the findings.

FINDINGS OF FACT

1. Respondent is licensed as a real estate broker and was so licensed at all times relevant hereto. He has taught real estate salesman courses at Hillsborough Junior College for about eight years.

2. In February, 1982, Thomas E. Webb and Johnnie M. Webb, husband and wife, signed an offer to purchase real estate owned by Ruby Carline (Exhibit 1). This document was prepared by Respondent as broker and signed by him as witness and escrow agent. The offer was not accepted by the seller.

   
   

3. Respondent had a listing agreement (Exhibit 6) on property owned by Ruby Carline in Seffner, Florida, giving him exclusive right to sell this property until June 12, 1982, at a price of $65,800, with buyer assuming an existing mortgage of $27,000 at ten (10) percent. There was also a second mortgage on the property in the amount of $10,000 at eighteen (18) percent.

   
   

4. Shortly after Exhibit 1 was not accepted by Carline, the Webbs' trailer burned and they needed a residence quickly. Respondent inquired of Carline how much she would take to move out of her house and she told him $10,000, but needed $2,000 to actually relocate her furniture.

   
   

5. On March 5, 1982, Respondent acknowledged receipt of $2,000 from Webb (Exhibit 7). Shortly thereafter, this money was paid to Carline and she vacated her house. Webb moved in during the latter part of March and commenced paying rent.

   
   

6. Following this, Respondent prepared an updated contract for sale and purchase which was signed by Thomas Webb and Ruby Carline in early May (Exhibit 3). This contract provided for a purchase price of $59,900, with 7,000 deposit held in escrow by Respondent, and the balance of the purchase price comprising the existing first mortgage of $27,000 to be assumed by the buyer; a purchase money mortgage in the amount of $15,900 to be obtained; and the second mortgage in the amount of $10,000. Special Clause XII provided:

   
   

   Buyer shall rent property for $560 per month with an option to purchase by June 12, 1982, which shall be

   extended an additional 90 days at time of purchase. Buyer shall assume first mortgage and pay balance to seller.

   
   

7. At the time this contract was executed Webb had paid Respondent $7,000. The additional $5,000 cashier's check was given to Respondent by Webb on April 27, 1982 (Exhibit 7) and Exhibit 3 was thereafter prepared. The $5,000 was not placed in escrow but in Respondent's operating account. By check dated May 1, 1982, Respondent disbursed $2,666 to Carline from the proceeds of this down payment plus some rent moneys collected from Webb and claimed the balance of

   $3,594 as commission on the sale of the property.

   
   

8. Carline testified that she received only $1,000 from Respondent in the form of a check when she moved out of the house. Respondent actually paid her

   $2,000, of which $1,000 was in cash. In her letter to Respondent dated January 1, 1983 (Exhibit 11), Carline acknowledged the $2,000 as a gratuitous payment to her vacating the property and resettling elsewhere.

   
   

9. Webb was expecting fire insurance money on his trailer which was to provide funds necessary to pay off the second mortgage. They expected to get additional financing either from a bank or from the seller, or both. When it became evident Webb was experiencing difficulty obtaining financing, Respondent prepared Exhibit 2, another contract for sale and purchase, executed by seller October 22, 1982, which, in Special Clause XII stated:

   This is a lease option contract, buyer has 30 days to close on property. Rent shall be $560 per month until property

   is transferred. Property is being purchased "as is". Commission has been paid by seller.

   
   

   This contract also provided for purchase price of $59,900. Deposit (paid to owner-seller Ruby Carline) of $7,000, buyer to assume existing first mortgage of

   $27,000, the second mortgage to General Finance Corporation in the amount of

   $10,000 to be paid off and balance to close of $25,900. Clause III provided that if any part of the purchase price is to be financed by third party loan, the contract is contingent upon the buyer obtaining a firm commitment for said loan within 30 days at a rate not to exceed 18 percent for 15 years in the principal amount of $25,000. At the time this contract was signed, all parties knew the buyer needed additional financing to close.

   
   

10. While the Webbs occupied the house, Respondent collected the rent, usually in cash, and remitted same to Carlile in the manner received. By the time the closing date of September 12, 1982, arrived, it became evident Webb was having difficulty obtaining financing and would be unable to close. Webb demanded return of the $7,000 deposit from Respondent and Carline. Carline demanded Respondent pay her all of the moneys received by him from Webb; and Respondent claimed a set-off of fees paid by him for appliance repairs, for the institution of eviction proceedings against Webb and for services in collecting the rent for Carline.

    
    

11. Respondent paid Webb some $1,200 and attempted to get Carline to release him from liability for further payment to Carline (Exhibit 15). Carline reported the incident to the Real Estate Commission.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

13. In working up a "deal" to sell Carline's house to Webb, Respondent attempted to prepare an agreement giving Webb the option to purchase Carline's house without specifying any consideration for the option and using a contract for sale and purchase form to prepare the option. In doing so he prepared contract that was duly executed by both parties, neither of whom understood that the written terms of the contract were binding and not any explanation that may have been given by Respondent. Inducing both the buyer and the seller to believe they had agreed to something not contained in the contract constitutes fraud, misrepresentation, and dishonest dealing.

    
    

14. By failing to place the $5,000 in escrow, Respondent violated Section 475.25(1)(k), Florida Statutes. By disbursing this money before the sale closed, Respondent placed himself in the position of being unable to deliver these funds to the person who may subsequently become entitled to this money. Accordingly, when the sale failed to close and the buyers became entitled to a return of their deposit in accordance with the terms of the contract, Respondent failed to account for or deliver to the buyer moneys due to them in violation of Section 475.25(1)(d), Florida Statutes.

From the foregoing it is concluded that Respondent, in his handling of the negotiations and contracts executed between Carline and Webb, violated the provisions of Section 475.25(1), Florida Statutes, as alleged. It is

RECOMMENDED that Respondent's license as a real estate broker be suspended for a period of eighteen (18) months.

DONE AND ENTERED this 16th day of April, 1984, at Tallahassee, Florida.

K. N. AYERS, 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 16th day of April, 1984.

COPIES FURNISHED:

Tina Hipple, Esquire Department of professional

Regulation - Legal Post Office Box 1900

Tallahassee, Florida 32301

Paul P. Jackson

7211 North Dale Mabry Street Suite 200

Tampa, Florida 33614

Harold Huff, Executive Director Division of Real Estate Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Fred M. Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 83-003255

Orders for Case No: 83-003255