STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION ) ex rel. GEORGE E. ENGLISH, )

)

Petitioner, )

)

vs. ) CASE NO. 76-1995

)

EDWARD T. DREYER, DONALD E. ) ROBESON & DREYER REAL ESTATE, INC. )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on April 26, 1977 at Melbourne, Florida.

APPEARANCES

For Petitioner: Frederick H. Wilsen, Esquire and

Gorham Rutter, Jr., Esquire Staff Attorneys

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: T. P. Warlow, Jr., Esquire

3405 Pine Tree Road Orlando, Florida 32804

and

Thomas E. Shine, Esquire

Flagship Bank Building, Suite 100 Melbourne, Florida 32935

RECOMMENDED ORDER

By Administrative Complaint filed September l, 1976, the FREC ex rel.

George E. English, seeks to revoke, suspend, or otherwise discipline the registration of Edward T. Dreyer as a real estate salesman, of Donald E. Robeson as a real estate broker, and Dreyer Real Estate, Inc. as a corporate broker. As grounds there for it is alleged that Edward T. Dreyer failed to place earnest money deposits in escrow in five separate real estate transactions; promised to pay a referral fee to a non- registrant; failed to pay a promissory note when due; and that by reason of the foregoing charges has been guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest, and untruthful that the money, property and rights of investors may not safely be entrusted to him.

With respect to Robeson and the corporate broker, the complaint alleges that Robeson should have known of Dreyer's failure to place the five earnest money deposits in escrow and failed to direct tile activities of the salesman whose license was held under the supervision of broker Robeson. One count alleges this constitutes a course of conduct or practice showing the registrants are so incompetent, negligent, dishonest and untruthful that the money, property, transactions and rights of investors may not safely be entrusted to them.

Fifteen witnesses were called by Petitioner, two Respondent's testified in their own behalf, and 25 exhibits were admitted into evidence.

FINDINGS OF FACT

1. At all times relevant herein Edward T. Dreyer (Dreyer) was a registered real estate salesman, Donald E. Robeson was a registered real estate broker, and Dreyer Real Estate, Inc. was a registered corporate broker.

   
   

2. During the period between January 23, 1975 and September 30, 1975 Dreyer received earnest money down payments from purchasers Rodriques for $875 on 1/23/75, the Beria Baptist Church for $2650 on 2/13/75, Vinoya for $800 on 3/12/75, Berger for $1700 on 5/14/75, and Behrendt for $800 on 9/30/75.

   
   

3. Checks payable to Dreyer Real Estate, Inc. from Behrendt and Rodriques were converted to cashier's checks payable to Dreyer Real Estate, Inc. and the Behrendt payment was deposited in Dreyer Real Estate, Inc. account at First Citrus Bank of Indian River County, Vero Beach. Behrendt's check (Exhibit 5) contained the notation "Deposit on Trust Malabar for E 1/2 of N 1/4 of Lot 11, 2T 295 R 37E." None of these down payments were deposited in Dreyer Real Estate, Inc.'s Trust Account. (Exhibit 14)

   
   

4. Dreyer Real Estate, Inc. Operating Account (Exhibit 15) shows a deposit of $2100 on 2/14/75, and $1400 on 5/22/75.

   
   

5. None of the buyers in the above transactions authorized Dreyer to use the down payments although Behrendt, whose check contained the notation that it was to be deposited in trust, told Dreyer, when he gave him the check, that he (Dreyer) was the first one to be paid and felt by this comment he had given Dreyer tacit approval to use the money. All of these buyers expected their deposit to be returned if the transaction did not go through.

   
   

6. On December 9, 1975, after Dreyer became aware that he was under investigation, he prepared affidavits that the parties to the above transactions had allowed Dreyer Real Estate, Inc. to utilize the down payment or interim funds pending final disposition of the matter. These affidavits (Exhibits 2, 4, 8, 11, and 13) were executed by the buyers and sellers except for Exhibits 11 and 13 which Anderson refused to sign.

   
   

7. In July or August, 1975 Dreyer, who had a listing on property adjacent to property owned by Paul De Furia told De Furia that he would pay him $250 if he found a purchaser for the property Dreyer had listed. Subsequent thereto De Furia introduced Dreyer to one Trofibio who purchased the property in August, 1975. Although De Furia demanded his "finders fee" Dreyer never paid De Furia.

   
   

8. On December 9, 1974 Dreyer executed a promissory note to a Mrs. Rice to evidence a loan from her of $1500. This note has not been paid.

9. Respondent Robeson is President and Active Firm Member of Dreyer Real Estate, Inc. He has been a broker since August, 1973 when he commenced so serving for Respondent, Dreyer Real Estate, Inc. He comes to the office almost every day, usually for a short time in the afternoon, and is generally aware of the transactions here involved.

   
   

10. During the time these transactions occurred the office was being moved and/or renovated and money for the improvements was needed. Dreyer told Robeson that the parties to these transactions had authorized the firm to use the deposits before the transactions closed and he (Robeson) did not question the statement. Robeson owns one share of the 60 shares outstanding in Dreyer Real Estate, Inc. Presumably the remaining shares are held by Dreyer.

    
    

11. Robeson paid little attention to the contracts or other transactions that occurred in the office and received 5 percent of the commissions earned by the office unless he was the salesman in which case he received the usual salesman's commission of 50 percent.

    
    

12. In 1973 Dreyer's license as a real estate broker was revoked. The grounds for revocation of this license were not presented at the hearing. Dreyer testified that he felt the only mistake he made in the transactions here involved was that he did not get authorizations from the parties to use the earnest money deposits at the time the contracts were executed.

    
    

    CONCLUSIONS OF LAW

    
    

13. Section 475.25(1) F.S. provides in pertinent part that the registration of a registrant may be suspended for a period not to exceed two years upon a finding of fact showing that the registrant has:

    
    

    "(a) ... violated a duty imposed upon him by law or by the terms of a listing contract...

    (d) Violated any provisions of this chapter, or any lawful order, rule or regulation made

    or issued under the provisions of this chapter...

    
    

    (f) Shared a commission with, or paid a fee or other compensation to, a person not properly registered as a real estate broker or salesman under the laws of this state, for the referral of real estate business, clients, prospects or customers, or for any one or more of the services set forth in

    s 475.01(2). For the purpose of this section it shall be deemed immaterial that the person to whom such payment or compensation is made shall have made said referral, or perform said service, from within this state, or elsewhere; provided, however, a registered real estate broker of this state may pay a referral fee or share a real estate broker's commission with a real estate broker duly licensed, or registered, under the

    laws of a foreign state so long as said foreign broker does not violate any law of this state.

    (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 disbursement thereof is properly authorized, or, if a salesman, fail

    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.

    
    

    Section 475.25(3) F.S. provides in pertinent part:

    
    

    "The registration of a registrant may be revoked... if he shall be found guilty of a course of conduct or practice 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."

    
    

14. By failing to immediately place the earnest money deposit received from the buyers in escrow Respondents violated provisions of the real estate license law above quoted. Once these deposits have been placed in escrow the broker can disburse them only when properly authorized to do so. Even had the parties authorized Dreyer to use the down payment, which the evidence does not show, he could do so only after the down payment had been first placed in escrow.

    
    

15. Obviously the primary actor in the violations here involved was Dreyer. He sold the property, received the down payment, and failed to deliver these payments to his broker or to place them in the escrow account, which presumably was maintained for that purpose.

    
    

16. This was not an isolated transaction whereby one deposit was not placed in escrow, but appears to be the standard operating practices of the office. During the period December 31, 1974 to January 30, 1976 no deposits were made in the Dreyer Real Estate Inc, trust account. The five transactions presented. in this case constitute a course of conduct clearly in violation of

    475.25 (3) above quoted.

    
    

17. No action of a real estate broker or salesman can result in greater danger to the money and property of investors and those with whom the registrant may sustain a confidential relation than misuing funds entrusted to the registrant by his client.

    
    

18. Although Robeson was a passive participant in these transactions he has a positive duty to supervise the operations of the salesmen working under the authority of his registration. By failing to perform this supervision, albeit over the owner of the firm, Robeson must be charged with the sins of those for whom he is responsible. In the light of circumstances most favorable

    to him, Robeson was so incompetent or negligent that the money, property, transactions or rights of investors were seriously hazarded.

    
    

19. Count 12 alleges, and the evidence adduced, shows that Dreyer offered to pay De Furia, a non-registrant, a finders fee for locating a buyer for property Dreyer had listed. Section 475.25(1)(f) F.S. above quoted makes it an offense to pay a fee or share a commission with the non-registrant. All parties here agreed that no such fee was paid. Accordingly there is no violation of 475.25(1)(f) F.S.

    
    

20. With respect to Count 13 of the Complaint alleging that Dreyer failed to pay the promissory note given to Mrs. Rich when due, it is sufficient to say that this is not the type conduct proscribed by 475.25(1)(a) F.S. There was no evidence that this note involved a real estate transaction or was in any manner related to the real estate business of Dreyer. If the acts alleged here constitute a violation of the Real Estate License Law so would a failure to make the mortgage payments on his house. These acts are civil in nature and there are civil remedies available to the holder of the note. Even if the allegation in Count 13 could be found to be technically a violation of 475.(1)(a) F.S. it would be inimical to the real estate community to allow the use of the threat of disciplinary action to enforce the collection of a debt.

    
    

21. From the foregoing it is concluded that Respondent, Edward T. Dreyer, Donald E. Robeson and Dreyer Real Estate, Inc. are guilty of all allegations in the Administrative Complaint as alleged except Charges 12 and 13, and of Charges

12 and 13 Respondent Edward T. Dreyer is not guilty. It is therefore,

RECOMMENDED that the registration of Edward T. Dreyer as a real estate salesman, the registration of Donald E. Robeson as a real estate broker, and the registration of Dreyer Real Estate, Inc. as a corporate broker be revoked.

DONE and ENTERED this 11th day of May, 1977, in Tallahassee, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

COPIES FURNISHED:

Frederick H. Wilsen, Esquire and Gorham Rutter, Jr., Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

T. P. Warlow, Jr., Esquire 3405 Pine Tree Road Orlando, Florida 32804

Thomas E. Shine, Esquire Suite 100

Flagship Bank Building Melbourne, Florida 32935

Docket for Case No: 76-001995

Orders for Case No: 76-001995