STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 94-6037

) DAU VIET VU and AMERICAN ) HOMES & INVESTMENT REALTY, ) INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Final hearing was held in Orlando, Florida, on February 9, 1995. The parties, attorneys, witnesses, and court reporter attended the hearing in Orlando. Robert E. Meale, Hearing Officer of the Division of Administrative Hearings, participated by videoconference from Tallahassee.

APPEARANCES

The parties were represented at the hearing as follows: For Petitioner: Steven W. Johnson, Senior Attorney

Department of Business and

Professional Regulation Division of Real Estate Legal Section, Suite N-308

Hurston Building, North Tower

400 West Robinson Street Orlando, Florida 32802-1772

For Respondent: Dau Viet Vu, pro se

1048 Pine Hills Rd. Orlando, Florida 32808

STATEMENT OF THE ISSUE

The issue in this case is whether Respondents are guilty of mishandling an escrow deposit.

PRELIMINARY STATEMENT

On June 24, 1995, Petitioner issued an Administrative Complaint alleging that Respondent Vu is a licensed Florida real estate broker and the qualifying broker for Respondent American Homes. The Administrative Complaint alleges that Respondent Vu informed Petitioner of a dispute over an escrow deposit that he was holding, Petitioner declined to issue an escrow disbursement order but

advised Respondent Vu to refer the matter to arbitration or interplead the deposit in circuit court, and Respondent failed to pursue either alternative.

Based on the foregoing, the Administrative Complaint alleges that Respondents are guilty of culpable negligence or breach of trust, failure to timely account or deliver funds, and failure to implement remedial action.

The Administrative Complaint alleges that the Florida Real Estate Commission had previously issued a final order reprimanding Respondent Vu and imposing a $500 fine. The Administrative Complaint alleges that Respondents Vu and American Homes are guilty for a second time of conduct that warrants suspension or have been found guilty of conduct or practices showing such incompetence, negligence, dishonesty, or untruthfulness that property and trust may not be safely placed with them.

Respondents requested a formal hearing.

At the hearing, Petitioner called three witnesses and offered into evidence five exhibits, which were all admitted. Respondent called one witness and offered no exhibits into evidence.

Neither party ordered a transcript. Petitioner's proposed findings are adopted or adopted in substance.

FINDINGS OF FACT

1. Respondent Vu is and was at all material times a licensed real estate broker, holding Florida license number 0394778. He is and was at all material times the qualifying broker for Respondent American Homes and Investment Realty, Inc., which holds Florida license number 0250718. Respondent Vu owns Respondent American Homes.

   
   

2. In 1990, Mr. and Mrs. Serge Delisfort contacted Respondents about purchasing a residence. The Delisforts eventually signed a contract to purchase a home and paid the $500 earnest money deposit to Respondents.

   
   

3. Later learning that they would be liable to pay an annual homeowners' fee of $72, the Delisforts told Respondent Vu that they did not want to complete the purchase. The listing broker, which was not either Respondent, omitted mention of the homeowners' fee from the listing information supplied Respondents and the Delisforts.

   
   

4. The sellers refused to release the deposit. Confronted with the dispute, Respondent Vu promptly requested an escrow disbursement order from the Florida Real Estate Commission on March 29, 1991. Due to the presence of a factual or legal dispute, the Florida Real Estate Commission informed Respondents, in a 47-word letter dated October 16, 1991, that it could not issue an escrow disbursement order. The October 16 letter warns Respondents to "immediately choose one of the other two alternatives available to you under ss. 475.25(1)(d), Florida Statutes, to settle this dispute, i.e., arbitration or a civil court."

   
   

5. Instead, Respondents did nothing. The Delisforts periodically contacted Respondent Vu and asked if he could release their deposit. The sellers sold their house to another party and moved to Puerto Rico. The Delisforts contacted another broker and purchased a different house through the new broker.

6. Eventually, the Delisforts contacted the Florida Real Estate Commission and asked its help in obtaining the deposit. An investigator for the Division of Real Estate interviewed Respondent Vu on March 1, 1994. Explaining the reason for the delay, Respondent Vu, possibly confused, stated that the buyers had left Orlando for awhile. In fact, the buyers had remained in Orlando.

   
   

7. At the suggestion of the investigator, Respondent Vu contacted both parties, and they agreed to split the deposit equally. Respondent Vu prepared the paperwork, which the parties signed on March 11, 1994. At that time, Respondents paid each party $250. The Delisforts have since listed their home for sale by Respondents.

   
   

8. While improperly holding the $500 deposit, Respondent Vu was preoccupied by the illnesses and deaths of his parents, who remained in Vietnam. Despite the possibility of trouble upon his return to Vietnam, Respondent Vu traveled to Vietnam at least once during this time to care for one or both of his parents.

   
   

9. Respondents failed to implement timely the remedies established by law and identified by the Florida Real Estate Commission in its letter of October 26, 1991. Respondent Vu acted two and one-half years later, only after one of Petitioner's investigators contacted him.

   
   

10. It is no excuse that the costs of arbitration or court would have consumed a large part of the amount in dispute. Confronted with that prospect, the sellers or the Delisforts would probably have settled the matter. If not, that would have been their problem, not Respondents'. The fact is that Respondents failed to discharge their obligations by presenting the dispute for resolution in a timely fashion.

    
    

11. Nonetheless, the amount involved is modest. Neither party had a clear claim to the funds, nor was either party exceptionally troubled by Respondents' casual handling of the matter. The Delisforts contacted the Florida Real Estate Commission, but did not realize that they were in effect filing a complaint against Respondents, in whom they entrusted the sale of their current home.

    
    

12. A final order issued July 18, 1988, involves Respondents' mishandling of a salesperson's commission. The husband of the salesperson owed Respondent Vu some money, and both men agreed that the debtor's wife would work off the debt by selling real estate at Respondent American Homes. However, the debtor's wife was of a different mind. After earning her first commission, she refused to allow Respondents to credit it against her husband's debt. When Respondent Vu ignored her demand for payment, she filed a complaint, which resulted in the final order and Respondents' proper payment of the commission.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes. All references to Rules are to the Florida Administrative Code.)

    
    

14. Section 475.25(1)(b) provides that the Florida Real Estate Commission may impose discipline if a licensee:

    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 . . ..

    
    

15. Section 475.25(1)(d)1. provides that the Florida Real Estate Commission may impose discipline if a licensee:

    
    

    Has 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 deliver, any personal property . . .. 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 con- flicting 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;

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

    4. With the written consent of all parties, submit the matter to mediation. ...

       
       

       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.

       
       

16. Section 475.25(1)(o) provides that the Florida Real Estate Commission may impose discipline if a licensee:

    
    

    Has been found guilty, for a second time, of any misconduct that warrants his suspension or has been found guilty of a course of conduct

    or practices which show that he is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors,

    or those with whom he may sustain a confidential relation, may not safely be entrusted to him.

    
    

17. Petitioner must prove the material allegations against Respondent by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

18. Petitioner has proved that Respondents failed to account for or deliver escrow funds in the manner required by law. Respondents took the first step of notifying the Florida Real Estate Commission. But they failed to follow the directions of the Commission, and the law, which required them either to submit the matter to arbitration or interplead the deposit in circuit court.

    
    

19. Petitioner has failed to prove that the acts and omissions of Respondents violate other cited statutes. Respondents' failure to pursue arbitration or litigation is not so incompetent, negligent, dishonest, or untruthful as to render Respondents unworthy of the trust that must necessarily reside in real estate brokers. The amount in dispute was small and the matter was not urgent, as reflected in part by the Commission's leisurely processing of the request for an escrow disbursement order. At some point, Respondent Vu should have turned his attention to this matter, regardless of its relative importance or the personal troubles that he was undergoing. But it is also revealing that the buyers themselves have deemed Respondents sufficiently trustworthy to entrust them with the sale of their home.

    
    

20. Rule 61J2-24.001(3)(e) provides a recommended range of penalty of "[u]p to 5 years['] suspension" for a violation of Section 475.25(1)(d). Rule 61J2-24.001(4)(b) identifies some circumstances in mitigation or aggravation, including the seriousness of the offense, degree of harm to the public or consumer, number of times Respondent has previously committed the offense, status of the license at the time of the offense, disciplinary history of Respondent, and degree of financial hardship imposed upon Respondent due to a fine or suspension.

    
    

21. All of the factors indicated in the rule strongly favor mitigation, except that Respondent was disciplined once before for an unrelated matter suggestive more of ignorance than intentional disregard of the law.

RECOMMENDATION

It is hereby

RECOMMENDED that the Florida Real Estate Commission enter a final order finding both Respondents guilty of violating Section 475.25((1)(d)1, reprimanding both Respondents, and requiring Respondent Vu to take a thirty-hour broker management course.

ENTERED on February 22, 1995, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings on February 22, 1995.

COPIES FURNISHED:

Darlene F. Keller Division Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900

Steven W. Johnson, Senior Attorney Department of Business and

Professional Regulation Division of Real Estate Legal Section--Suite N-308 Hurston Bldg., North Tower

400 West Robinson Street Orlando, FL 32802-1772

Dau Viet Vu

1048 Pine Hills Rd.

Orlando, FL 32808

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 10 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: 94-006037

Orders for Case No: 94-006037