ex rel. C. J. KEIDEL and )
HAROLD L. CLARK )
vs. ) CASES NO. 76-033
Respondents. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above style causes on March 23 and 24, 1976 at Titusville, Florida.
For Petitioners: Joseph A. Doherty, Esquire
For Respondents: David T. Young, Esquire
By Administrative Complaint filed December 4, 1975, the Florida Real Estate Commission ex rel. C. J. Keidel, seeks to revoke license number 0068002 held by Peerless Realty Company and license number 0076680 held by Jack Sakson on three counts alleging that Jack Sakson as Active Firm Member of Peerless Realty Company, did: (1) While acting as rental agent, failed to deposit monies received in an escrow account, disburse funds from such account without authority, and steal, appropriate and convert said funds to his own use; (2) Fail to pay an earned real estate commission to one of his salespersons; and (3) Fail to pay for a survey for which he had originally agreed to pay, involving tic sale of real property listed through his office.
By Administrative Complaint filed July 14, 1975, the Florida Real Estate Commission ex rel. Harold L. Clark, seeks to revoke the licenses of Jack Sakson and Peerless Realty Company on numerous counts alleging: (1) Dishonest dealing involving issuing a bad check on his escrow account and in the handling a disbursement of earnest coney deposit in a real estate transaction; (2) Failure to immediately place funds entrusted to him in an escrow account; (3) Conversion of monies entrusted to him; (4) Failure to account and deliver to the rightful recipient of escrow deposits; (5) Wrongful failure to deliver rentals received
from tenants to owner of property and failure to maintain said funds in an escrow account until disbursement is properly authorized; and (6) Pursuing a course of conduct or practices which show Respondent is so incompetent, negligent, dishonest and untruthful that money, property, transactions, and rights of investors may not be safely entrusted with him.
At the beginning of the hearing Respondent's motion for a continuance on the grounds that the attorney representing Respondent had been retained only a few days earlier, was denied. Ruling on Respondent's motion that the two hearings, scheduled to be heard on successive days be consolidated, was deferred at the beginning of the hearing, but was subsequently granted upon the commencement of the second day's hearing. Both cases involved the same parties and no reason for not consolidating these cases for the purpose of issuing one recommended order was shown.
Thereafter Petitioner presented 13 witnesses and 42 exhibits, the last two exhibits (41 and 42) being copies of subpoenas for witnesses who did not appear at the hearing. Upon completion of Petitioner's case Respondent did not present any evidence. After reviewing all evidence the following is submitted:
In November, 1972 Coastal Warehouse, a partnership, entered into a lease with Ray Industries for the rental of their property by Ray Industries. The lease provided that rental payments be made through Peerless Realty Company and also provided for renewal from year to year. The renewal clause was exercise by the lessee. By verbal agreement the lessor agreed to pay Peerless
10 percent of the lease for managing the property, supervising repairs, collecting rent, etc.
Peerless' check for December, 1973 rent was forwarded to lessor on January 16, 1974 with a note on the letter (Exhibit 5) indicating payment was delayed due to late receipt of payment from lessee. Peerless' letter of February 26, 1974 (Exhibit 6) forwarded rent payment for January. Therein it was noted that on 4-24-74 lessor received a check for February and March rent and on 6-18-74 it received a check for April and May rent. This was the last rent check lessor received from Respondent. Upon inquiry to Respondent Sakson the lessor was advised that lessees were having problems meeting their rental payments. Upon inquiring of the tenants the lessor was advised that they had always made payments to Peerless when due. When no further payments were received through September, lessor instituted civil action against Respondents herein for the rental payments not received. On January 3, 1975 a final judgment was entered against Respondents in the amount of $3816.86 plus costs of
$31.00 (Exhibit 8). To date judgment has not been satisfied.
Exhibits 9 through 13, copies of checks payable to Peerless, show that lessee made timely rental payments in June, July, August, September, and October, 1974. None of these payments were forwarded to the lessor and the judgment represents four of these monthly payments.
On December 14, 1973, a contract for the sale of property was negotiated by a salesperson in Peerless' office and a $2000 earnest money deposit was received and deposited in Peerless Escrow Account. Due to default on the part of the buyer the transaction never closed and the buyer forfeited his deposit. By letter dated July 1, 1974 (Exhibit 16) Respondents notified the saleswoman Ms. Holly,nee Caspers, that the sale may not close, and if not, she would be entitled to $500 commission. Enclosed with letter dated 7-16-75
(Exhibit 17) Ms. Caspers received a check from Respondents on the Merritt Island Bank in the amount of $500 which she deposited at her bank in Hallandale. The check was returned by her bank steeped "Account Closed" (Exhibit 18) and her account was debited the amount of the check (Exhibit 19).
In December, 1974 property listed with Peerless was sold by another realty office. The purchaser desired a survey on the property at no expense to her. The salesman (Sutton) who negotiated the contract discussed the survey with Sakson and as a result understood that the cost of the survey would be split between the seller and the two real estate firms involved. The survey was commissioned by Sutton for $100. Upon receipt of the bill he forwarded the bill with his check in the amount of $25 to Peerless. He subsequently learned from the seller that the latter never agreed to pay part of the cost of the survey. Sutton was later told by Sakson that the cost of the survey had been paid. When the surveyor demanded payment from Sakson the latter said he would mail the check but never did so and discouraged the surveyer from coming by the office to pick up the check when he volunteered to do so.
Merritt Island Development Corporation, a Miami based company owned rental property on Merritt Island for which Peerless was engaged to act as rental agent, collect rent, and generally supervise property. There were two tenants of the building viz. Foam King and Atlantic Screen, each of whom made the rental payments promptly during the months of January, February and March, 1974. These checks were deposited in Peerless Realty Escrow Account. In May, 1974 Respondent forwarded to lessor a check in the amount of $1876.90 representing these three months rent from the two tenants. When this check was presented for payment it was dishonored. The check was thereafter twice redeposited upon the advice of Sakson that it would clear and each time it was dishonored. Sakson advised lessor several times that he would make the check good, but did not do so. On October 11, 1974 Merritt Island Development Corporation obtained a judgment against Peerless (Exhibit 32) in the amount of the check plus cost. This judgment was subsequently satisfied. In the interim the lessor contacted the tenant and requested payment be made direct to the Miami office which request was honored and lessor no longer engaged Peerless as rental agent.
In contract dated April 2, 1974, Jean Berkowitz presented a $10,000 check payable to Peerless Realty Company Escrow Account as an earnest money deposit on the property subject to the contract. The contract provided closing within 30 days of acceptance. The listing broker on this contract was Anderson Realty and the selling broker was Peerless. At the request of the buyer the closing date was extended one or two times. By letter of September 12, 1974 the attorney for seller advised buyer that on September 20, 1974 the buyer would tender deed and expected purchaser to be at the closing with sufficient funds to meet the obligations of the contract. At this closing neither the buyer nor Sakson appeared.
By letter dated September 20, 1974 (Exhibit 39) the attorney for seller advised the attorney for buyer that an extension of the contract would be granted until October 7, 1974 on the basis of the buyer making an additional deposit of $2,500 with the entire deposit of $12,500 paid to seller and non- refundable if contract did not close for any reason other than the fault of the seller. Peerless issued check dated 9-20-74 in the amount of $2,500 to seller. When presented for collection this check was dishonored. Subsequent thereto Sakson presented a cashier's check and another check totaling $2,500 to seller which were honored. When the October 16, 1974 closing date arrived the buyer did not appear. By letter of October 24, 1974 the attorney for buyer advised
Respondent that the contract had been terminated by reason of failure of the buyer to carry out the terms of the contract and demanded payment of the seller's share of the $10,000 deposit, $4,687.50. This sum was never disbursed by Respondent to the seller.
CONCLUSIONS OF LAW
Section 475.25(1) F.S. provides that the registration of a registrant may be suspended for a period of not exceeding two years, upon a finding of fact showing that registrant has:
"(a) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, 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, expressed or implied, in a real estate transaction; or,
* * *
(c) Failed to account or deliver to any person, including registrants under this chapter, and personal property such as money, fund, deposit, check, draft, abstract or title, mortgage, conveyance, lease, or other document or a 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, and 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;
. . . or,
* * *
(e) Been guilty of a crime against the laws of this state or any other state or of the United States, involving moral turpitude, or fraudulent or dishonest dealing; . . or,
* * *
(i) Fail, 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 or banking institution located and doing business in Florida, or, deposit said funds in a trust or escrow bank account maintained by him with some bank located and doing business in Florida, wherein said funds shall be kept until disbursment thereof is properly authorized,
. . ."
Section 475.25(3) provides that:
"The registration of a registrant may be revoked if the registrant shall, . . be 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."
None of the evidence here presented was rebutted by Respondents. For each of the failures of Respondent to maintain funds in his escrow account until disbursement was authorized, the above quoted provisions of the statute authorize suspension of a license for a period not to exceed two years. For each failure to remit funds when due to those with whom Respondent had a fiduciary relationship and duty, as described in the above findings of fact, the commission would be authorized to suspend Respondents' registrations for a period not to exceed two years. For each incident involving making false material statements involving business transactions to those with whom he had a fiduciary duty, Respondent subjects his license to suspension for a period not to exceed two years.)
Paying money from the escrow account to himself when such payment is not authorized by law or contract constitutes the crime of embezzlement and warrants suspension of a registrant's license for a period not to exceed two years.
Writing checks on an account knowing there is insufficient funds to allow honor of the check when presented for payment constitutes a further violation of the laws of this state.
Here we have a situation where Respondent, over a period of some two years, failed on numerous occasions and under varying circumstances to carry out the agreements he had made or which were imposed upon him by law. As a result of his delicts funds which should have been delivered to the proper recipient thereof, were misappropriated by Respondent resulting in financial loss to the proper recipients of those funds. The numerous instances of these transgressions, as established the facts noted above, constitute a course of conduct or practices which show that Respondent is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions and rights of investors, or those with whom he might sustain a confidential relation, may not be safely be entrusted to him. It is therefore,
RECOMMENDED that licenses number 0068002 and 0076680 issued to Peerless Realty Company, Inc. and Jack Sakson, respectively be revoked.
DONE and ENTERED this 30th day of April, 1976 in Tallahassee, Florida.
K. N. AYERS Hearing Officer
Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
