STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 85-3174

)

1. P. O'SULLIVAN and PREFERRED ) PROPERTIES OF LEE COUNTY, INC., )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Final hearing in the above-styled action was held on April 7, 1986, in Ft. Myers, Florida, before Mary Clark, Hearing Officer of the Division of Administrative Hearings.

   The parties were represented as follows: For Petitioner: James Gillis, Esquire

   Division of Real Estate

   400 W. Robinson Street Orlando, Florida 32802

   
   

   For Respondent: Simon M. Harrison, Esquire

   PERCH & HARRISON, P.A.

   1820 Colonial Blvd.

   Ft. Myers, Florida 33907

   
   

   ISSUE

   
   

   The issue in the proceeding was whether the Respondents violated various provisions of Florida Statutes regulating the real estate profession by failing to return a $2,000.00 deposit, failing to notify the Florida Real Estate Commission of a deposit dispute, and failing to maintain the deposit in a trust account or other proper depository.

   
   

   BACKGROUND AND PROCEDURAL MATTERS

   
   

   This proceeding was initiated on August 30, 1985, with the filing of Petitioner's Administrative Complaint alleging eight counts of violations of Section 475.25, Florida Statutes.

   Respondent timely requested a formal hearing. At the hearing Petitioner presented the testimony of three witnesses and four exhibits. Respondent testified on his own behalf and presented one additional witness and six exhibits, including two composites. The parties jointly stipulated to the submission of the testimony of James Gordon through his deposition taken on November 6, 1985. Both parties submitted proposed findings of fact and conclusions of law. These have been carefully considered and to some extent have been incorporated in this Recommended Order. Specific rulings on each finding of fact are made in the attached Appendix to this order.

   
   

   FINDINGS OF FACT

   
   

   1. The following findings are facts stipulated by the parties in their Prehearing Stipulation filed on March 31, 1986

      
      

      1. That Petitioner is a state government licensing and regulatory agency charged [w]ith the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated thereto.

         
         

      2. That Respondent C.P. O'Sullivan is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0144214 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, % Preferred Properties of Lee County, Inc., 311 Homestead Road, Lehigh Acres, Florida 33936.

         
         

      3. That Respondent, Preferred Properties of Lee County, Inc., is now and was at all times

         material hereto, a corporation licensed as a real estate broker in the State of Florida having been issued license number 0169117 in accordance with Chapter 475, Florida

         Statutes. The last license issued was at the business address of 311 Homestead Road, Lehigh Acres, Florida 33936.

         
         

      4. At all times alleged herein, Respondent

         C.P. O'Sullivan was licensed as a real estate

         broker and sole qualifying broker and officer

         of Respondent Preferred Properties of Lee County, Inc.

         
         

      5. That on or about September 25, 1984, the Respondents solicited and obtained a sales contract entered into by Claretha Pinkney, as

         purchaser, and Elsie Barning, as seller, of certain residential property.

         
         

      6. That in connection therewith, the Respondents received in trust from Claretha Pinkney, a $2,000.00 earnest money deposit.

         
         

      7. The contract was contingent upon Claretha

         Pinkney obtaining a new mortgage loan.

         
         

   2. Claretha Andrews Pinkney is a school teacher for the Lee County Board of Education. In July 1984, she moved to the Lee County area from Georgia where she had also been a school teacher. (T. 20, 35). She contacted Respondent, Preferred Properties about her desire to purchase a house and began working with Kay Alcantara, a sales associate with Preferred Properties. (T-21, 85).

      
      

   3. Ray Alcantara introduced Mrs. Pinkney to C. P. O'Sullivan, who did a pre-qualification in his office. That is, he determined, through a series of questions, what price range to look for. During the pre-qualification, Ms. Pinkney gave her profession and her income, said she was from Georgia and said she owned a house in Georgia, which she rented out. She also said she had minimal liabilities. (T-99-100, 107-108).

      
      

   4. A house was found at 13 Apache Street in Lehigh Acres, and on September 25, 1984, a contract to purchase the house for

      $39,900.00 was executed. Mrs. Pinkney made deposits of $500.00 and $1500.00 in accordance with the contract. The contract

      required that she " make immediate application for a mortgage loan, or loans at a local lending institution at the prevailing rate of interest, in the amount of $35,900.00." The remaining

      $2,000.00 was to be due at the time of closing. (Petitioner's Exhibit #2).

      
      

   5. Claretha Pinkney applied for mortgage financing, through Columbus Mortgage Company, a Ft. Lauderdale based mortgage broker. She has relatives on the east coast who in the past had dealt with that company. (T-24-25, Respondent's composite Exhibit 2) The company did not maintain an office in Ft. Myers, but conducted business there through advertising WATTS Telephone number. (Deposition of James Gordon, P. 16). A representative of the company came over for the closings which took place in the office of Tri-County Title Company in Lee County, but the level of business never warranted opening a branch office in Ft. Myers. (Deposition of James Gordon, pp.

      15-16, 20).

      
      

   6. In early November, Nancy Leclair, an employee of Columbus Mortgage Company, told Mrs. Pinkney that the company could not go forward with her application until they had verification that she had funds to close on the sale. (T. 43- 44). Mrs. Pinkney planned on using money from the Retirement System of the Georgia Board of Education but the retirement check had been sent to her prior address and was routed back to the Board of Education before it finally reached her in Florida. (T-23, 27) Mrs. Pinkney asked to have the loan application stay open while she was trying to get the funds from the Georgia Retirement System (T-45). Mrs. Pinkney told Kay Alcantara about the problem with getting the loan approved and the lost retirement check (T-27). Kay Alcantara stayed in touch with both Nancy Leclair and Mrs. Pinkney regarding the status of the loan and the retirement check. (T-89). Before November 20, Mrs. Pinkney called Kay Alcantara to say that she received a letter from the Georgia School System that her money was forthcoming but that she was eligible to leave the money in the fund and later receive benefits. If she cashed the check, she would lose her benefits. (T-86-87). The funds from the retirement system amounted to approximately $13,000.00 (T-52, 53, Respondent's Exhibit 43).

      
      

   7. On November 19, 1984, at Kay Alcantara's Suggestion, Mrs. Pinkney met with Kay, Lynn Aspinwall (the office manager) and C. P. O'Sullivan in Mr. O'Sullivan's office. Mrs. Pinkney informed the realtors that she did not wish to go through with the deal, that she didn't want to lose her retirement benefits

      and did not want to take the money out of the Georgia Retirement System. Mr. O'Sullivan told her that if she didn't want the house she would lose the $2,000.00 deposit and she should think about it overnight. If she still felt the same way, she could come in the next day and sign a release of the deposit. (T-87, 104-105).

      
      

   8. On November 20, 1984, Mrs. Pinkney returned to the office and signed the agreement forfeiting her binder deposit of

      $2,000.00. (T-33, Petitioner's Exhibit #4). At no time prior to, or including that date, did she ask to have her deposit returned. (T-105).

      
      

   9. On the same date, November 20, 1984, Mrs. Pinkney sent a letter to Nancy Leclair at Columbus Mortgage Company enclosing a copy of another contract for sale for an entirely different property and a different realtor. (T-57, 58, Respondents' composite Exhibit #2). This contract is dated November 4, 1984, and is for a single family residence for a total sales price of

      $34,900.00.

      
      

   10. Mrs. Pinkney received her Georgia Retirement fund check and on December 3, 1984, deposited it in Sun Bank/Southwest. (Respondent's Exhibit #3). She later returned the money to the retirement fund and her admitted purpose in making the deposit was to show she had sufficient funds to close and to "fake out" the lender, while waiting for some other funds to materialize. (T-62, 65).

       
       

   11. Two statements of credit denial were eventually issued by Columbus Mortgage Company. The first, dated January 15, 1985, was clearly for the Apache Street property. The second, dated January 20, 1985, describes the transaction as "First Mortgage financing for a purchase of a home." (Respondent's composite Exhibit #2, Petitioner's Exhibit #3).

       
       

   12. Neither C. P. O'Sullivan nor Preferred Properties were informed by Columbus Mortgage Company that Mrs. Pinkney's loan was turned down. (T-107, 119).

       
       

   13. Considered as a whole, the evidence in this proceeding strongly supports the inference that Claretha Pinkney reneged on her contract to purchase the Apache Street property not because she was turned down for the loan, but because she found another house that she preferred. That is why she freely signed the release for the $2,000.00. Respondents didn't know this at the time that the release was discussed and prepared; however, they

knew of a different, highly credible basis for Mrs. Pinkney's rejection of the property: to qualify for the loan she would have to use her retirement money; she didn't want to use the money and lose her benefits. This knowledge was sufficient for the Respondents' reasonable and justifiable belief that Mrs.

Pinkney was not entitled to return of her deposit.

CONCLUSIONS OF LAW

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

   
   

2. The burden of proof is on the Petitioner, Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977).

   
   

3. Petitioner's Administrative Complaint charges C. P. O'Sullivan and Preferred Properties of Lee County, Inc., with ". . .fraud, misrepresentation, concealment, false promises, dishonest dealing by trick, scheme or device, culpable negligence, and breach of trust in a business transaction in violation of subsection 475.25(1)(b), Florida Statutes . . ." (Counts I and II).

   
   

4. Petitioner failed to prove that C. P. O'Sullivan or Preferred Properties knew, or should have known, that Claretha Pinkney was denied a loan at the time that they obtained her release of deposit in November 1984. No competent evidence indicated that even Claretha Pinkney knew that she was denied a loan until some time in January 1985. Her actions prior to January were wholly inconsistent with such knowledge Respondents did not breach her trust and their actions in obtaining the release were consistent with their knowledge that Mrs. Pinkney had the funds available but refused to use them to qualify for the loan.

   
   

5. In Counts III, IV, V and VI, Respondents are charged with violations of subsection 475.25(1)(d), Florida Statutes by failing to account and deliver the $2,000.00 deposit to the person entitled and failing to notify the Florida Real Estate Commission of a deposit dispute.

   
   

6. Petitioner failed to prove that Claretha Pinkney was entitled to the $2,000.00 deposit Mrs. Pinkney chose not to seek a loan from a local lending institution. She also voluntarily signed a release of the funds at a time when she was pursuing

   the purchase of a different property through a different realtor. Her action in signing the release was consistent with her change of mind and refusal to perform under the contract for sale.

   
   

7. By the time that Mrs. Pinkney complained that she was entitled to return of her $2,000.00, Respondents had already disbursed the funds from their trust account in reliance on the November 20, 1984 release. Therefore, the "escape procedure" and obligation to notify the commission provided in subsection 475.125(1)(d) is inapplicable.

   
   

8. Counts VII and VIII allege violations of subsection 475.25(1)(k), Florida Statutes by failure to maintain the

   $2,000.00 deposit in a trust account or other proper depository until disbursement is properly authorized.

   
   

9. Petitioner failed to prove that the release signed by Mrs. Pinkney was not proper authorization for disbursement of the $2,000.00 deposit.

RECOMMENDATION

Based upon the foregoing, it is, therefore RECOMMENDED:

That a final order be entered dismissing all counts of the Administrative Complaint.

DONE and ORDERED this 13th day of May, 1986, in

MARY W. CLARK, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 1986.

COPIES FURNISHED:

Harold Huff, Executive Director Division of Real Estate

400 W. Robinson Street Orlando, Florida 32802

James Gillis, Esquire Division of Real Estate

400 W. Robinson Street Orlando, Florida 32802

Simon M. Harrison, Esquire Perch ~ Harrison, P.A.

1820 Colonial Blvd.,

Ft. Myers, Florida 33907

Fred Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore A. Carpino, Esquire Department of Professional Regulationff

130 North Monroe Street Tallahassee, Florida 32301

APPENDIX

The following constitutes my specific rulings pursuant to subsection 120.59(2), Florida Statutes on all of the proposed Findings of Fact submitted by the parties to this case.

Rulings on Petitioner's Proposed Findings of Fact

1. Adopted in Finding of Fact #l.b.

   
   

2. Adopted in Finding of Fact #1.c.

   
   

3. Adopted in Finding of Fact #l.d.

   
   

4. Adopted in Finding of Fact #1.e.

   
   

5. Adopted in Finding of Fact #l.f.

   
   

6. Adopted in Finding of Fact #l.g.

   
   

7. Rejected as contrary to the weight of evidence. The finding that the loan was applied for is, however, adopted in Finding of Fact #5.

   
   

8. Adopted in Finding of Fact #11.

   
   

9. Adopted in Findings of Fact #7 and 8.

   
   

10. Rejected as contrary to the weight of evidence.

    
    

11. Rejected as contrary to the weight of evidence.

    
    

12. Rejected as contrary to the weight of evidence.

    
    

13. Rejected as unnecessary and, as to entitlement to the money, wholly unsupported by competent evidence.

Rulings on Proposed Findings of Fact Submitted by the Respondent

1. Rejected as unnecessary.

·2. Adopted in substance in Findings of Fact #1-12 except

2.m and 2.0 which are unsupported by the evidence. The record does not reveal when Mrs. Pinkney attempted to claim the

$2,000.00; it does establish that she did not claim the

$2,000.00 before or at the time she signed a release.

1. Rejected as a restatement of testimony rather than a finding of fact.

   
   

2. Rejected as unnecessary.

Docket for Case No: 85-003174

Orders for Case No: 85-003174