STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, ) EDGAR M. GREENE, JR., REP., )

)

Petitioner, )

)

vs. ) CASE NO. 77-653

) P. D. NO. 3177

GRACIA N. WITTMACK, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard on May 24, 1977, at 1:00 P.M. in the Conference Room of the Dade County Agricultural Center, 18710 S. W. 288th Street, Homestead, Florida, before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was heard on an Administrative Complaint filed against Gracia Wittmack by the Florida Real Estate Commission alleging that Wittmack had failed to account for and deliver to John and Betty Bertzel an escrow deposit upon default of a contract for purchase and sale, that Wittmack failed to maintain said deposit in the trust escrow account, and that Wittmack appropriated the deposit to her own use. These actions constitute violation of Section 475.25(1)(c) (i), and (e), Florida Statutes. At hearing the Florida Real Estate Commission abandoned that portion of its Complaint alleging that Wittmack had appropriated the escrow deposit to her own use.

APPEARANCES

For Petitioner: Bruce I. Kamelhair

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Alan J. Kluger, Esquire

Myers, Kaplan, Levinson & Kenin Brickell Executive Tower

1428 Brickell Avenue

Miami, Florida 33131 FINDINGS OF FACT

1. Gracia Wittmack is a licensed real estate broker holding License No. 0097736, issued by the Florida Real Estate Commission.

   
   

2. On August 28, 1974, Betty and John Bertzel signed a deposit receipt contract for the purchase and sale of a certain lot which they owned and wished to sell in Key Largo, Florida. The Bertzels were represented by Keyes Company as broker for the Bertzels. The buyer was Tri-Sailing, Inc., contracting through its president, Robert J. Markowski, and represented by Chet Anderson, a salesman for Leeside Realty whose broker is Gracia N. Wittmack. This contract

   provides that $500 was received through Chet Anderson by Gracia N. Wittmack, t/a Leeside Realty. Gracia N. Wittmack deposited the $500 which was received into her escrow account entitled "Leeside Realty Escrow Account" at the Pan American National Bank of Coral Gables, Florida. The contract entered into between the Bertzels and Tri-Sailing on August 28, 1974, contained a clause which stated that if rezoning was required to BU-2, it would be accomplished by the buyer at buyer's expense. Due to a moratorium on rezoning by the State of Florida, the contract dated August 28, 1974, never closed due to the buyer's inability to obtain rezoning of the property to BU-2.

   
   

3. On September 13, 1975, John and Betty Bertzel and Tri-Sailing, through Robert J. Markowski as President, entered into a second deposit receipt contract. Tri-Sailing was again represented by Chet Anderson as salesman for Gracia Wittmack, t/a Leeside Realty. This contract again acknowledged receipt of the sum of $500 as an earnest money deposit. This contract provided for a forfeiture of the escrow money if the buyer defaulted under the terms of the agreement. In this instance the Bertzels were represented by Kennasten Properties as real estate broker. The second $500 deposit was not in fact paid by Tri-Sailing, and the $500 deposit referred to in the contract of September 13 1975, was the same $500 initially received on the contract dated August 28, 1974. This deposit was retained in the escrow account by Wittmack between the two dates and until the account was closed in 1976. According to Wittmack, at that time it was transferred to "GBW, Inc. Escrow Account" at Southeast First National Bank of Dadeland. The contract dated September 13, 1975, did not have a contingency provision relating to the rezoning of the property to BU-2. In accordance with the contract, abstracts were tendered to Markowski. Markowski refused to accept the abstracts preferring instead to default on the transaction because he was unable to obtain rezoning of the property to BU-2.

   
   

4. On May 17, 1976, the Bertzels advised Wittmack that they considered the contract in default and demanded the $500 on deposit in the escrow by letter, Wittmack was not in her office when the letter was received, and this fact was communicated to Mr. Bertzel by Joseph E. Monticino, Jr., by letter on May 19, 1976. This letter, Exhibit 16, recites that Mrs. Wittmack would return on, May 24, 1976, at which time the matter would be brought to her attention. When advised of the demand for the escrowed monies by the Bertzels, Gracia Wittmack contacted Kennaston Properties, the cooperating broker representing the Bertzels. She advised Kennaston Properties that their client had made demand based upon a default of the purchaser. Wittmack took no further action to resolve distribution because she received no further contact from the Bertzels or Kennaston. Because of the duration of negotiations, Wittmack's neglect might have been excusable but for her subsequent acts.

   
   

5. The Bertzels/Tri-Sailing transaction was part of a plan of acquisition initiated by Markowski in behalf of Tri-Sailing commencing with the purchase of a lot owned by Gracia Wittmack. In addition to purchasing the lot owned by Wittmack, Markowski also was interested in purchasing adjoining lots. Markowski gave $500 to Wittmack as a deposit receipt on the purchase of her lot, and also gave her $1500 with which to make deposits on the three adjoining lots. It was one of these adjoining lots which was owned by the Bertzels and which became the subject of the contracts discussed above. Markowski's instructions to Wittmack were that, should she not be able to negotiate the purchase of the adjoining lots, Wittmack was to apply those monies towards the purchase price of the lot which Tri-Sailing had purchased from her.

   
   

6. According to her own admission, at some time subsequent to May 17, 1976, Gracia Wittmack transferred the $500 paid as a deposit receipt on the

   Bertzel transaction from her escrow account. At that time Tri-Sailing's account on the purchase of Wittmack's property was credited with the payment of $500.

   Presumably Wittmack obtained direct advantage of the money while Tri-Sailing obtained credit for $500 on the purchase of Wittmack's property. Therefore, in summary, the foregoing facts show that a contract was entered into between Bertzel and Tri-Sailing for the purchase of real property and a $500 escrow deposit was received by Gracia Wittmack. A contract was also entered into between Gracia Wittmack and Tri-Sailing for the purchase of real property.

   Subsequently, Tri-Sailing defaulted on the contract with the Bertzels and the Bertzels made demand for payment of the escrow funds pursuant to the forfeiture provision of the contract. No demand was made for the funds by Tri-Sailing, whose president, Markowski, expected to loose the deposit. Subsequent to Bertzel's demand, Gracia Wittmack removed the funds from her escrow account and credited Tri-Sailing for $500 on the purchase of her property. Wittmack's actions were the result of her lack of knowledge of her duties as a fiduciary and her interjecting herself into the conflict between the Bertzels and Tri- Sailing as an advocate for her client as opposed to an escrow agent.

   
   

7. No evidence of prior disciplinary action by the Florida Real Estate Commission pursuant to Chapter 475, Florida Statutes, was presented.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Florida Real Estate Commission has jurisdiction over this case.

   
   

9. This case was brought by the Florida Real Estate Commission pursuant to its authority under Chapter 475, Florida Statutes, and heard pursuant to the provisions of Section 120.57, Florida Statutes.

   
   

10. Gracia Wittmack has been charged with the failure to deliver escrowed monies to a person who is entitled to them and the failure to maintain monies received as a deposit in an escrow account in violation of Section 475.25(1)(c) and (i), Florida Statutes.

    
    

11. The facts clearly indicate that Gracia Wittmack, t/a Leeside Realty, did receive monies from Tri-Sailing, Inc., as a deposit for the purchase of real estate by Tri-Sailing, Inc. from John and Betty Bertzel. Further, the facts show that Tri-Sailing defaulted upon the purchase of the property and the Bertzels made demand for the deposit under the forfeiture provisions of the contract. Markowski, as President for Tri-Sailing, acknowledged the default and made no demand for return of the deposit preferring forfeiture of the deposit to purchase of property which he could not use. Subsequently, Gracia Wittmack removed the $500 from her escrow account crediting Tri-Sailing with $500 towards the purchase price of the real property purchased by Tri-Sailing from her.

    
    

12. The facts show that Gracia Wittmack did violate Section 475.25(1)(c), Florida Statutes, by failing to deliver to the Bertzels upon their demand monies to which she had no claim after the default on the contract. The protracted negotiations of the parties and Wittmack's contract of Kennaston as the cooperating broker could be considered in mitigation of the failure to account and deliver the monies to the Bertzels upon their demand; however, her subsequent conduct in removing the money from the escrow account and crediting Tri-Sailing's account for the purchase of her own property is inconsistent with the belief that negotiations were still in progress. Because she did credit

Tri-Sailing's account, Wittmack's conduct was not in the strictest sense a misappropriation of the money but it was clearly improper conduct and a

violation of her duties as escrow agent and a violation of Section 475.25(1)(i), supra.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Florida Real Estate Commission suspend the license of Gracia Wittmack, t/a Leeside Realty, for a period of one (1) year.

DONE and ORDERED this 27th day of July, 1977, in Tallahassee, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

APPENDIX

The Respondent, Gracia Wittmack, t/a Leeside Realty, filed a Proposed Recommended Order in this case. This Proposed Recommended Order has been considered and the following findings are made regarding its contents:

1. The findings of paragraphs 1, 3(1)(2) and 4 of the Proposed Recommended Order are included in the Hearing Officer's statement of the case in the Recommended Order.

2. The findings of paragraph 2 of the Proposed Recommended Order is paragraph 1 of the Findings of Fact in the Recommended Order.

3. The findings of paragraphs 5, 6, 7, 8, 9, 10 and 11 in the Proposed Recommended Order are contained in paragraph 2 of the Recommended Order. That portion of paragraph 21 of the Proposed Recommended Order which states that no evidence was introduced refuting Wittmack's and Markowski's testimony regarding deposit of the funds is irrelevant in light of the affirmative finding of paragraph 2 of the Recommended Order that the $500 was deposited to Wittmack's escrow account.

4. The findings of paragraphs 12, 13 and 14 of the Proposed Recommended Order are contained in paragraph 3 of the Recommended Order.

5. The findings of paragraphs 15, 16 and 18 of the Proposed Recommended Order are contained in paragraph 4 of the Recommended Order.

6. The findings of paragraphs 17, 19 and 20 of the Proposed Recommended Order are contrary to the testimony of the Bertzels who knew that the contract contained a no zoning contingency clause. Although Markowski stated he didn't realize the clause had been deleted, he recognized the contract date September

   13 1976 as a binding contract. Further, no misunderstanding of the parties would be a basis for releasing Wittmack from her fiduciary duties after demand was made for the funds.

7. The findings of paragraph 22 of the Proposed Recommended Order are irrelevant in light of the findings of paragraphs 2, 3 and 6 regarding the deposit of the $500 to and its removal from Wittmack's escrow account.

8. The findings of paragraph 23 of the Proposed Recommended Order are contained in paragraph 3 of the Recommended Order.

9. The findings of paragraph 24 of the Proposed Recommended Order are rejected in light of the findings contained in paragraph 3 and 6 of the Recommended Order.

10. The findings of paragraph 25 of the Proposed Recommended Order are rejected as being relevant in light of the Hearing Officer's findings that regardless of what escrow account the funds were deposited, they were removed and were not delivered to the Bertzels.

11. The findings of paragraph 26 of the Proposed Recommended Order are contained in paragraphs 3 and 6, and paragraph 7 above, which find that the funds were held in escrow. The name of the account and its location is irrelevant. The record, Exhibit 8, reflects at least a $500 balance at all times in that account until the account was closed. The records of the opening of the Dadeland account were not introduced. But for the Respondent's admission that she removed the money and credited Tri-Sailing's account and the collaborative testimony of Markowski that this occurred, there would be no evidence of the alleged violation of removing the escrowed funds.

12. The findings of paragraph 27 of the Proposed Recommended Order are contained in paragraph 7 of the Recommended Order.

COPIES FURNISHED:

Bruce I. Kamelhair, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Alan J. Kluger, Esquire

Myers, Kaplan, Levinson & Kenin Brickell Executive Tower

1428 Brickell Avenue

Miami, Florida 33131

Docket for Case No: 77-000653

Orders for Case No: 77-000653