STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-803

)

COOKE CATRON REALTY, INC. )

and JAMES F. CATRON, )

)

Respondents. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, at Fort Lauderdale, Florida, on October 4, 1977, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Frederick H. Wilsen, Esquire

Staff Attorney

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida

For Respondents: James F. Catron

Cooke Catron Realty, Inc. 5805 Margate Boulevard Margate, Florida

ISSUE PRESENTED

Respondents' alleged violation of subsection 475.25(1)(a), 475.25(1)(c), and 475.25(3), Florida Statutes, as set forth in the Administrative Complaint.

Inasmuch as Respondents were not represented by legal counsel at the hearing, the Hearing Officer explained their rights in administrative proceedings to James F. Catron who elected to represent himself and Cooke Catron Realty, Inc.

FINDINGS OF FACT

1. Cooke Catron Realty, Inc. is now and was at all times alleged in the Administrative Complaint a corporation registered as a real estate broker doing business at 5805 Margate Boulevard, Margate, Florida. Respondent James F. Catron is now and was at all times alleged in the Administrative Complaint a registered real estate broker and the active broker and officer of Cooke Catron Realty, Inc. (Stipulation)

   
   

2. In January, 1976, Richard H. Goodwin, Jr. and Christine S. Goodwin, his wife, owned a four-unit apartment building at 7650 Southwest 10th Court, North

   Lauderdale, Florida, described as Lot 7, Block 13, Lauderdale North Park, Section 3. The Goodwins were having marital difficulties and decided to separate at this time and divest themselves of mutually-owned property. In a conversation with a salesman for respondents, Mr. Goodwin learned that James F. Catron was in the business of purchasing investment properties and reselling the same whereupon he would divide any profit with the former owner. Goodwin thereafter entered into negotiations with Catron for the sale of the apartment building. It was orally agreed that Catron would pay $62,700.00 for the property with a $1,000.00 down payment, and assume a first mortgage with Southern Federal Savings and Loan Association of Broward County in the amount of approximately $57,400.00 and a second mortgage with Seacrest Homes, Inc., John

   E. Abdo, Trustee, in the approximate amount of $5,300.00. It was further agreed that Catron would pay the Goodwins 30 percent of 80 percent of any net profit realized when he resold the property. As a consequence of this agreement, the Goodwins, on January 19, 1976, executed a deposit receipt contract embodying the above terms except that it recited the receipt of $10.00 as a deposit rather than $1,000.00, and made no mention of assumption of the mortgages. However, the sum of $1,000.00 was paid to the Goodwins by Catron. Although Mr. Goodwin testified that Catron signed this contract, Catron denied it and no such contract signed by Catron was placed in evidence at the hearing. (Testimony of

   R. Goodwin, C. Goodwin, Catron, Petitioner's exhibit 1)

   
   

3. Mr. Goodwin, on January 19, 1976, executed a document authorizing Cooke Catron Realty, Inc. to collect rents from the tenants of the apartment building. Catron, anticipating consummation of the purchase, proceeded to collect rentals in the amount of approximately $800.00 per month for the next four and one-half months, for total collections of approximately $3,600.00. He also made some repairs to the property and paid utilities bills. The Goodwins believed that he would take steps to assume the two mortgages on the property and take over the payments thereon. Although Mr. Goodwin testified that he and his wife had executed a warranty deed and delivered it to Catron, Catron denied receipt of such a deed and it was not produced at the hearing. Accordingly, it cannot be found that such a deed was in fact executed and delivered. The rents were collected by a limited partnership called Forest Run, Limited, of which Catron was a partner. Although the February payments were made on the mortgages, they were discontinued when Catron discovered that he could not assume the second mortgage from Seacrest Homes, Inc. without payment of $1,000.00 to the trustee, Abdo. As a consequence, the Goodwins filed suit against the respondents in the Broward County Circuit Court on June 23, 1976, requesting that any agreements concerning the property be rescinded, and that an accounting be ordered and a receiver appointed to administer and manage the property in question. A receiver was appointed by the court. Thereafter, in August 1976, Southern Federal Savings and Loan Association filed suit to foreclose its mortgage on the property and obtained summary judgment in the Broward County Circuit Court on January 25, 1977. The property was thereafter sold at public sale and bought in by Southern Federal. On January 25, 1977, the suit of the Goodwins against respondents was dismissed by stipulation after the parties had reached an amicable settlement in the matter. (Testimony of R. Goodwin, C. Goodwin, Petitioner's Exhibits 2-4)

   
   

   CONCLUSIONS OF LAW

   
   

4. Petitioner seeks to take adverse action against the licenses held by the respondents based upon three counts alleging violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint. These counts are discussed separately below.

5. Count 1. This count alleges that respondent committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, trick, scheme or device, culpable negligence, and breach of trust in a business transaction in violation of subsection 475.25(1)(a), F.S. This all encompassing charge is apparently based on the totality of the transaction involving Catron's promises to assume the existing mortgages on the apartment building and his failure to do so, his alleged advice to the Goodwins that they need not obtain legal representation since he could handle everything, the alleged failure to record a warranty deed, and the retention of rental money from the tenants of the apartment building in question.

   
   

6. It should first be noted that, in the absence of a written contract, neither of the respondents can be held accountable for failure to consummate the contemplated purchase. The evidence discloses that both parties to the proposed transaction entered into it in good faith and with the intention of effecting a purchase and sale essentially on the terms included in the unexecuted deposit receipt contract. However, after Catron discovered that the second mortgage on the property was not assumable without the payment of additional funds to the mortgagee, he ceased making payments on the mortgages, but nevertheless continued collecting rents until suit was filed by the sellers and a receiver appointed. Although it might be said that an enforceable contract of sale had emerged from the deposit receipt contract, together with the parties' acknowledgment of sale by the January 19, 1976, memorandum as to collection of rents, and the part performance of such a contract by payment of a deposit collection of rents and making repairs on the building on the part of Catron, it is considered unnecessary to reach a conclusion in that respect. It is clear that Catron acted as an individual in the transaction and not in his capacity as a real estate broker. No commissions were involved, nor were any other indicia of a brokerage transaction. It is true that Section 474.25(1)(a) may be invoked in any "business transaction," but the evidence falls short of establishing any false promises, fraud, deceit or the like. Likewise, since respondents were not acting in their licensed capacity, no question can rise as to a possible breach of trust.

   
   

7. Count 2. This count alleges that the respondents failed to account to and deliver over to the Goodwins money that had come into their hands and which was not their property and which they were not in law or equity entitled to retain under the circumstances, in violation of Section 475.25(1)(c), F.S. This statutory provision is restricted to instances where the licensee has operated as a broker or salesman in a real estate transaction. Inasmuch as it has been concluded above that respondents did not act in such capacity in the instant transaction, they cannot be held to have violated the cited provision.

   
   

8. Count 3. By this count, petitioner seeks to discipline respondents for an alleged course of conduct or practices showing that they are so incompetent, negligent, dishonest and untruthful that the money, property and transactions and rights of investors or those with whom they may sustain a confidential relation may not be safely entrusted to them, in violation of Section 474.25(3),

F.S. Again, this statutory provision clearly envisages a relationship of broker and client which was not Involved in the transaction in question. Accordingly, it is concluded that respondents may not be held responsible thereunder.

In view of the foregoing, it is concluded that the charges against respondents should be dismissed. However, it would not be inappropriate for the petitioner to direct a letter to James F. Catron pointing out the fact that problems such as those raised here can frequently arise in personal transactions

of a licensee, unless he exerts every effort to ensure that such transactions are clearly separated from those which involve a professional relationship.

RECOMMENDATION

That the charges against the respondents, James F. Catron and Cooke Catron Realty, Inc., be dismissed.

DONE and ENTERED this 26th day of October, 1977, in Tallahassee, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

James F. Catron and

Cooke Catron Realty, Inc. 5805 Margate Boulevard

Margate, Florida 33063

Docket for Case No: 77-000803

Orders for Case No: 77-000803