STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 84-3705

)

ANNE ROCKAFIELD, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing in this cause was held on February 6, 1985, in Orlando, Florida, before Diane A. Grubbs, a hearing officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Fred Langford, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32801

For Respondent: Ms. Anne Rockafield

713 Woodward

Orlando, Florida 32803

ISSUE

Whether respondent violated sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes, by the manner in which she handled the real estate transaction involving the property located at 29 S. Lawsona.

BACKGROUND

By Administrative Complaint filed April 6, 1984, petitioner alleged that on or about September 30, 1983, respondent received a $500 check as an earnest money deposit in connection with the purchase of certain real property; that the purchasers refused to close on the property; that respondent returned the check to the purchasers without the prior knowledge and consent of her employing broker, the seller or tee cooperating broker; and that respondent failed to inform her employing broker of the sales contract from September 30, 1983 to November 1, 1983, and failed to inform him that she had returned the check until November 7, 1983. Based on the foregoing allegations, petitioner charged respondent with dishonest dealing, culpable negligence, and breach of trust in a business transaction, in violation of section 475.25(1)(b), and with failing to place with her registered employer a deposit check received in trust, in

violation of section 475.25(1)(k). Respondent filed an Election of Rights form in which she disputed the factual allegations of the complaint and requested a formal hearing. The matter was referred to the Division of Administrative Hearings on October 23, 1984. Prior to the hearing the parties filed a prehearing stipulation.

At the hearing, petitioner presented the testimony of two witnesses, Howard

1. Babcock and Robert C. Sinclair, and had two exhibits introduced into evidence. The respondent testified on her own behalf. One exhibit was introduced into evidence as a joint exhibit. The petitioner filed proposed findings of fact and conclusions of law; the respondent did not.

   
   

   FINDINGS OF FACT

   
   

   1. Respondent is a licensed real estate salesman and was a licensed real estate salesman at all times relevant to the instant charges. In September 1983, respondent was registered as a real estate salesman with 100 percent Real Estate Incorporated. Robert Sinclair was the qualifying broker for 100 percent Real Estate Incorporated.

      
      

   2. On or about September 29, 1983, respondent obtained an Offer of Purchase on a home located at 29 S. Lawsona from Linda O'Leary and James T. Bagley along with a check from James T. Bagley in the amount of $500 as earnest money. The resulting contract was entered into evidence as Petitioner's Exhibit 1.

      
      

   3. On the day the purchasers signed the contract, but after they had signed the contract, the purchasers visited the home and discovered that there appeared to be extensive termite damage. Mr. Bagley was concerned about the termite damage, as was the respondent, and therefore the respondent promised Mr. Bagley that she would hold his check until she could get the termite estimate from Mr. Babcock and check with the termite company to find out how bad the damage was.

      
      

   4. Although the respondent was able to obtain the termite estimate from Mr. Babcock's office the following day, she was unable to contact the person who had conducted the termite inspection. She also was unable to contact the purchasers. She was unable to contact Mr. Bagley for approximately a week and it was another week before Mr. Bagley went to the house with a contractor to determine how much it would cost to repair the termite damage. The contractor thought that the minimum cost would be $10,000. At that point Mr. Bagley decided that he was no longer interested in the house, and the respondent returned his check.

      
      

   5. The $500 check was never turned over to Robert Sinclair or 100 percent Realty. Respondent knew she should not have held the check and was aware that by doing so she was, as she stated, "in hot water." However, respondent also believed that the seller had misrepresented the extent of the termite damage and was misinterpreting the terms of the contract.

      
      

   6. Mr. Sinclair was unaware of the existence of the contract until the end of October, although he had a discussion earlier with the respondent regarding whether an "as is" clause in a contract could override the specific printed provision of the standard contract related to termite infestation. That discussion was obviously related to the contract on the house on Lawsona.

      CONCLUSIONS OF LAW

      
      

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

      
      

   8. Section 475.25(1) authorizes the Florida Real Estate Commission to suspend a license for a period not to exceed 10 years, to revoke a license, to impose an administrative fine not to exceed $1,000 for each count or separate offense, and/or to issue a reprimand, if it finds that a licensee:

      
      

      (b) [h]as been guilty of . . . dishonest dealing by trick, scheme, or devise, culpable negligence, or breach of trust in any business transaction in this state or any other state.

      . . .

      . . .

      (k) [h]as failed . . . if a salesman, to immediately place with his registered employer any money, fund, deposit, check, or draft en- trusted to him by any person dealing with him as agent of his registered employer.

      
      

   9. In the instant case, the evidence clearly establishes that the respondent failed to place with her registered employer the earnest money check given to her by Mr. Bagley in connection with the contract on the house on Lawsona. Respondent therefore violated section 475.25(1)(k), Florida Statutes. Further, the evidence clearly establishes that the failure to place the check with her registered employer was not due to oversight or simple neglect but was a conscious decision made by the respondent. An integral element of committing a "breach of trust" is scienter, which is defined as "knowingly, to signify guilty knowledge." Brod v. Jernigan, 188 So. 2d 575 (Fla. 2nd DCA 1966). Respondent knew that she should not have retained the $500 check, but chose to do so anyway. Further, she made a unilateral decision to return the check to Mr. Bagley because she thought that "there would be no way he'd ever get his deposit back" and, under the circumstances, it would be unfair for Mr. Bagley to lose his deposit. (T-77). From the foregoing it is apparent that the respondent is guilty of dishonest dealing by trick, scheme, or devise, and breach of trust in a business transaction. Cf., Department of Professional Regulation, Florida Real Estate Commission v. Markowitz, 5 FALR 734-A (Final Order entered January 18, 1983). Respondent, by her conduct, is also guilty of culpable negligence, which is defined as "a failure to exercise that degree of care rendered appropriate by the particular circumstances and which a man of ordinary prudence in the same situation and with equal experience would not have omitted." Department of Professional Regulation v. Contessa, 5 FALR 1312-A (Final Order entered April 19, 1983).

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order

finding that the respondent is guilty of violating sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes, and suspending respondent's license for a period of three (3) months.

DONE and ENTERED this 1st day of May, 1985, in Tallahassee, Leon County, Florida.

DIANE A. GRUBBS

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 1st day of May, 1985.

COPIES FURNISHED:

Harold Huff, Executive Director Department of Professional Regulation

P. O. Box 1900 Orlando, Florida 32802

Salvatore A. Carpino, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Fred Langford, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32801

Ms. Anne Rockafield 713 Woodward

Orlando, Florida 32803

Fred Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 84-003705

Orders for Case No: 84-003705