STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-4934

)

JAMES G. ADAIR, t/a )

INVESTOR'S EQUITY )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William F. Quattlebaum, held a formal hearing in the above-styled case on July 2, 1991, in Panama City, Florida.

APPEARANCES

For Petitioner: Janine B. Myrick, Esq.

Department of Professional Regulation Division of Real Estate

400 W. Robinson Street

P.O. Box 1900

Orlando, Florida 32802 For Respondent: No appearance

STATEMENT OF THE ISSUE

The issue in this case is whether the allegations of the Administrative Complaints are correct and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On May 17, 1990, Petitioner filed an Administrative Complaint alleging that the Respondent had violated Section 475.25(1), subsections (b), (d), (e) and (k), Florida Statutes. Respondent disputed the factual allegations and requested a formal hearing. The Petitioner forwarded the request to the Division of Administrative Hearings for further proceedings.

By Notice of Hearing dated September 13, 1991, the hearing was scheduled for November 14, 1990. Petitioner subsequently moved to abate the case due to the inability to locate the Respondent. The motion was granted, and the parties were directed to advise the Hearing Officer of mutually acceptable dates upon which the case could be heard.

By Notice of Hearing dated January 16, 1991, the hearing was scheduled for April 26, 1991. The case was thereafter transferred to the undersigned. On April; 25, 1991, Petitioner requested continuance of the hearing due to inclement weather preventing counsel's attendance at the hearing. The motion was granted. The case was subsequently heard on July 2, 1991.

At the hearing, Petitioner presented the testimony of James A. White, Robert Hodges, and Paul Bratton, and had exhibits numbered 1-5 admitted into evidence. Respondent presented no witnesses or evidence.

No hearing transcript was filed. The Petitioner timely filed a proposed recommended order. The proposed findings of fact are ruled upon in the Appendix which is attached and hereby made a part of this Recommended Order.

FINDINGS OF FACT

1. Respondent James G. Adair is and at all material times has been licensed as a real estate broker, Florida license number 0409004, t/a Investor's Equity, 415 Beckwith Road, Suite 210, Panama City, Florida 23407

   
   

2. In November, 1988, Respondent negotiated a contract for the sale of real property identified as the Stopway Grocery. Said contract identified the purchasers of the property as Pakesh Jethani and Suresh S. Satiana. The Stopway Grocery property was owned by James A. White and located in Panama City, Florida.

   
   

3. Respondent obtained an earnest money deposit in the amount of $5,000, allegedly from the purchasers, which was deposited into the Investor's Equity escrow account.

   
   

4. Subsequently to the execution of the original contract, addenda to the contract were negotiated and agreed between the parties. The sale was to scheduled to close in December, 1988.

   
   

5. During the period of time between the contract execution and the scheduled date upon which the sale was to close, the seller repeatedly contacted the Respondent to assure himself that the sale and closing were proceeding appropriately. At no time did Respondent inform the seller of any problems with the transaction or suggest that the sale would not close in December, 1988.

   
   

6. The transaction did not close on the scheduled date. Neither the Respondent nor the purchasers attended the scheduled closing.

   
   

7. Subsequent to the closing date, the seller contacted the buyers identified in the contract, at which time the seller learned that the buyers would not complete the transaction.

   
   

8. The seller obtained legal representation. A demand for the escrow deposit was made on behalf of the seller.

   
   

9. By letter dated May 1, 1989, Respondent informed the Petitioner that a dispute related to the escrow deposit had arisen between the parties to the transaction. By letter dated May 15, 1989, Petitioner advised Respondent of alternative methods by which the dispute could be resolved, and requested that Respondent notify Petitioner of the method chosen.

10. After receiving no response, Petitioner, by letter dated July 14, 1989, again requested that Respondent notify Petitioner of the dispute resolution method chosen. As of July 1, 1991, Petitioner has received no further information from Respondent.

    
    

11. Subsequent to the July 14, 1989 letter, an investigator for the Petitioner went to the Investor's Equity office in order to review the escrow account documentation. 1/ He was unable to do so because the books and records were not at the office but rather were allegedly in the Respondent's possession. The investigator attempted to contact both the Respondent and the alleged buyers in order to ascertain the disposition of the escrow deposit, but was unable to locate any of them.

    
    

12. The Respondent's partner in the Investor's Equity operation, Robert Hodges handled mortgage brokerage activities for the business. The Respondent performed the real estate brokerage activities. Hodges testified that the referenced escrow deposit was received, but stated that the Respondent had stopped coming to the office during this time and was absent from the premises for more than one year. Hodges eventually closed the Investor's Equity operation. He stated that the relevant deposited funds were not in the escrow account, but was unable to otherwise identify the disposition of the deposit.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

14. Petitioner has responsibility for disciplinary action taken against licensed real estate brokers. Section 475.25(1), Florida Statutes.

    
    

15. The burden of proof is on the Petitioner to establish the truthfulness of the allegations of the Administrative Complaint by clear and convincing evidence. Balino v. Department of Health and Rehabilitative Services, 348 So.2d

    34 (Fla. 1st DCA 1977); Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The Petitioner has met the burden.

    
    

16. Section 475.25(1), Florida Statutes, in relevant part provides that the licence of a Florida real estate broker may be disciplined by the Petitioner when the Respondent:

    
    

    (b) Has 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 in this state or any other state, nation, or territory; 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 has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee

    that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.

    * * *

    1. 1. Has failed to account or deliver to any person, including a licensee under this chapter, 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, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission, or any secret or illegal profit, or any divisible share or portion thereof, 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. However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account,

       the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

       1. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

       2. With the consent of all parties, submit the matter to arbitration; or

       3. By interpleader or otherwise, seek adjudication of the matter by a court.

       If the licensee promptly employs one of the escape procedures contained herein, and if he abides by the order or judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property.

       2. Has failed to deposit money in an escrow account when the licensee is the purchaser of real estate under a contract where the contract requires the purchaser to place deposit money in an escrow account to be applied to the purchase price if the sale is consummated.

    2. Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

    * * *

    (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, credit union, 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, credit union, or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized; or has failed, if a salesman, to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent

    of his registered employer. The commission shall establish rules to provide for records to be maintained by the broker and the manner in which such deposits shall be made.

    
    

17. Violation of disciplinary statutes is punishable by denial of a license renewal application, or by a license suspension for a period not to exceed ten years, or by revocation of the license, or through an administrative fine not to exceed $1,000 for each count or separate offense, or through issuance of a reprimand, or through any combination thereof. Section 475.25(1), Florida Statutes.

    
    

18. Guidelines for the imposition of disciplinary action are as stated in Chapter 21V-24, Florida Administrative Code. Except where otherwise provided, the minimum penalty which may be imposed for each violation is a reprimand, or a fine up to $1,000 per count, or both.

    
    

19. In this case, Respondent has violated Section 475.25(1)(b), Florida Statutes, in that at no time did Respondent indicate to the seller of Stopway Grocery that the sale would not be consummated. The seller was led to believe that the matter was proceeding appropriately as late as the morning of the date set for closing. The recommended range of the penalty imposed for a violation of Section 475.25(1)(b), Florida Statutes, merits up to five years suspension or revocation. Rule 21V-24.001(3)(c), Florida Administrative Code.

    
    

20. Respondent has violated Section 475.25(1)(d), Florida Statutes, through the failure to account for the escrowed earnest money deposit and the failure to remedy the dispute related to the deposit through the measures identified in Section 475.25(1)(d)1, Florida Statutes. The recommended range of the penalty imposed for a violation of Section 475.25(1)(d), Florida Statutes, is up to five years suspension. Rule 21V-24.001(3)(e), Florida Administrative Code.

21. Respondent has violated Section 475.25(1)(e), Florida Statutes, in failing to comply with the applicable procedure for resolution of escrow deposit disputes, set forth at Rule 21V-10.032, Florida Administrative Code, and Section 475.25(1)(d), Florida Statutes. The Respondent further has violated Rule 24V- 14.012, Florida Administrative Code, in failing to maintain the records of the escrow deposit and in failing to make such records available for inspection by a representative of the Petitioner at all reasonable times during regular business hours. The recommended range of the penalty imposed for a violation of Section 475.25(1)(e), Florida Statutes, is up to eight years suspension or revocation. Rule 21V-24.001(3)(f), Florida Administrative Code.

    
    

22. Respondent has violated Section 475.25(1)(k), Florida Statutes, requiring that deposited escrow funds be kept until properly authorized disbursement. In this case, the funds were originally deposited, but were withdrawn from the account outside the disbursement process provided at Section 475.25(1), Florida Statutes, notwithstanding the fact that a dispute regarding the escrow funds remained unresolved. The recommended range of the penalty imposed for a violation of Section 475.25(1)(k), Florida Statutes, requires a minimum 90 day suspension and $1,000 fine, and can result in license revocation. Rule 21V-24.001(3)(l), Florida Administrative Code.

    
    

23. Count IV of the Administrative Complaint alleged that no sign was erected at the entrance to the Investor's Equity office. The evidence, contrary to the allegation, established that a sign was properly placed at the office entrance.

RECOMMENDATION

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

that the Department of Professional Regulation, Division of Real Estate, enter a Final Order revoking the real estate broker licensure of James G. Adair.

DONE and ENTERED this 1st day of August, 1991, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 1991.

ENDNOTES

1/ Contrary to the allegation of the Administrative Complaint, the office was properly identified by a sign at the office entrance.

APPENDIX TO RECOMMENDED ORDER

The Respondent did not file a proposed recommended order. The following constitute rulings on proposed findings of facts submitted by the Petitioner.

Petitioner

The Petitioner's proposed findings of fact are accepted as modified in the Recommended Order except as follows:

1. Rejected, irrelevant.

   
   

2. Rejected. The evidence does not establish that the escrow deposit was received from the purchasers. The evidence establishes that a deposit was received and that it was deposited into the Investor's Equity escrow account.

12. Rejected. The seller's testimony related to the buyers alleged statement regarding notice to the broker that the sale would not be consummated, is hearsay.

COPIES FURNISHED:

Janine B. Myrick, Esq.

Department of Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Mr. James G. Adair c/o Investor's Equity

415 Beckwith Road Suite 210

Panama City, Florida 32407

Darlene F. Keller, Director Division of Real Estate

Department of Professional Regulation Division of Real Estate

Hurston North Tower

400 W. Robinson Street

P.O. Box 1900

Orlando, Florida 32802

Jack McRay General Counsel

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-004934

Orders for Case No: 90-004934