Kimmig, Sr. seeks to revoke, suspend, or otherwise discipline the real estate broker's license of E. Ted Giles. The Complaint alleges that following the failure of a real estate sale to close because seller was unable to deliver clear title, the Defendant, in violation of s. 475.25(1)(c) F.S., refused to return the $500 deposit to the buyer.
At the beginning of the hearing Defendant submitted a Motion to Abate the proceedings and a Suggestion of no Jurisdiction on the part of the Hearing Officer. As grounds for the Motion to Abate it was alleged that the Plaintiff failed to notify Defendant of the charges prior to the institution of proceedings as required by S. 120.60(4) F.S. Here the Administrative Complaint was forwarded to Defendant with an Election of Rights Form which Defendant returned indicating that there were disputed issues of material fact and requested an administrative hearing. Further the Defendant submitted an answer denying the charges contained in the complaint. The Motion to Abate was denied.
The suggestion of lack of jurisdiction was premised upon the contention that the hearing is a judicial procedure and for the Division of Administrative Hearings to hold such a hearing is a violation of Article V, Section 1 of the Florida Constitution. Since these proceedings are administrative and not
judicial the "suggestion" was also denied. Thereafter 3 witnesses were called by Plaintiff, 2 witnesses, including Defendant, were called by Defendant, and 10 exhibits were admitted into evidence.
By contract dated March 13, 1974 Frederick W. and Judith P. Shaw placed
$500 as earnest money to purchase property from Comfort Builders, Inc. represented by Giles Realty. The $500 was duly placed in escrow. The contract provided that seller would furnish title insurance and buyer could take posession on April 1, 1974.
Buyer occupied the house as per the contract and delayed the initially intended closing to require the builder (seller) to correct defects. Shortly after the contract was executed buyer paid seller an additional $3,000 of the purchase money. This payment did not go through Giles.
At the first closing session on May 15, 1974 a subcontractor's lien was discovered and the closing did not occur. At a second scheduled closing additional liens against the property were discovered. The $500 check representing buyers' deposit that had been forwarded by Giles to First Federal Savings and Loan Association, who was to loan the mortgage money, was returned to Giles by letter of October 10, 1974 advising that they were unable to make the mortgage.
Subsequently the bank, which had also provided the construction mortgage money, foreclosed on the mortgage and took title to the property. Thereafter on March 21, 1975 the bank sold the property to Shaw who had occupied the premises since April, 1974.
After the property had been conveyed by the bank to Shaw, Giles prepared a Release of Deposit Receipt which was executed by Comfort Builders, Inc., the original seller, to allow the $500 deposit to be retained by Giles. When asked to execute this release Shaw declined. Whether Giles told Shaw that she had asked the FREC for an advisory opinion respecting the $500 as Shaw testified or only that she would ask for an advisory opinion as testified to by Giles is immaterial as no advisory opinion was requested by Giles.
Thereafter Shaw filed a complaint with FREC which led to the charges here under consideration. When this complaint was being investigated by Kimmig, Giles asked Kimmig for an advisory opinion and she was told she would have to request same from the Commission. Several years earlier Giles had obtained an advisory opinion by submitting a written request to the Commission, but no such request was submitted by Giles respecting the disposition of the $500 deposit of Shaw. The $500 has not been disbursed from the escrow account.
Mrs. Giles has been registered with the FREC for some 20 years and these are the first disciplinary proceedings ever brought against her. Exhibit
10 contains numerous achievements and recognitions received by Mrs. Giles showing an excellent reputation in the community.
CONCLUSIONS OF LAW
Section 475.25(1)(c) F.S. provides that the registration of a registrant may be suspended for a period not to exceed two years if the registrant:
"(c) Failed to account or deliver to any person, including registrants under this chapter, 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, 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; provided, however, that if the registrant shall, in good faith, entertain doubt as to his duty to account and deliver said property, or as
to what person is entitled to the accounting and delivery, or if conflicting demands therefor shall have been made upon him and he has not appropriated the property to his own use or intermingled it with his own property of like kind, he may notify the commission promptly, truthfully stating the facts, and ask its advice thereon, or after notice thereof to the commission, shall promptly submit the issue to arbitration by agreement of all parties, or interplead the parties, or otherwise seek an adjudication of the question in a proper court and shall abide, or offer to perform, the advice of the commission or the orders of the court
or arbitrators, no information against him shall be permitted to be maintained; . . ."
Here the broker, E. Ted Giles, represented the seller who is the one, absent a specific agreement to the contrary, required to pay the broker a commission when a ready, willing, and able buyer is produced. If the seller is unable to give good and merchantable title, and, as a result, the transaction does not close, the broker has performed the duty for which he was employed and the seller owes the broker the commission for which they contracted.
The fact that the buyer occupied the premises for a considerable period prior to all parties becoming aware that the seller could not convey good title is immaterial to the determination of who is responsible to pay the commission to the broker. The suggestion of the original seller that the broker retain the buyer's deposit as her commission, as the release of deposit purports to do, is at best a gratuitous attempt by the original seller to have someone else pay the commission he owes and is unable to pay the broker.
Although the buyer ultimately bought the property which the broker had succeeded in getting him to contract for, the broker did not thereby earn a commission from the buyer. The buyer bought the property from a different seller, and the original seller was entitled to no part of the buyer's earnest
money deposit. Since the seller was not entitled to any of this earnest money deposit, the seller's agent, the broker, likewise could not be entitled to this money.
From the foregoing it is concluded that E. Ted Giles wrongfully withheld the $500 earnest money deposit from the buyer Shaw and in so doing violated Section 475.25(1)(c), F.S.
It is further concluded that E. Ted Giles believed that the buyer had obtained the property partly through her efforts and that she was entitled to be paid for the effort expended in putting him into possession of the property. In view of E. Ted Giles prior good record and the evidence of her reputation in the community, it is therefore,
