STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 78-091

)

RALPH D. VILLENEUVE t/a )

DON'S REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard on February 10, 1978, in the County Courthouse, Escambia County, Pensacola, Florida, before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. The case was presented upon an administrative complaint filed with the Florida Real Estate Commission against Villeneuve containing fourteen (14) counts. This complaint alleges that Villeneuve had violated Section 475.25(1)(a) and (i), Florida Statutes, by his conduct with regard to several separate real estate transactions.

APPEARANCES

For Petitioner: Robert Pierce, Esquire

Florida Real Estate Commission

400 West Robinson Avenue Orlando, Florida 32801

For Respondent: O. E. Adams, Esquire

Post Office Box 12217 Pensacola, Florida 32502

A prehearing conference was held at which the Respondent admitted he was a registered real estate broker and admitted the following allegations contained in the administrative complaint:

In count one, paragraphs 1, 2, 3, 4, 5 and paragraph 6, as it was amended on the record;

In count two, paragraph 2;

In count three, paragraphs 2 and 4; In count four, paragraph 2, 3, and 4;

In count five, paragraph 1, 2, 3, 4, 5, and 7;

In count seven, paragraph 1, 2 and 3; In count eight, paragraph 2 and 3;

In count nine, paragraph 2, 3, 4, 5 and 6;

In count eleven, paragraph 2, 3, 4 and 5; In count twelve, paragraph 3;

In count fourteen, paragraph 1, 2 and 5.

The Respondent denied or was without knowledge to the remainder of the allegations contained in the administrative complaint.

ISSUE

Whether the Respondent violated Section 475.25(1)(a) and (i), Florida Statutes.

FINDINGS OF FACT

1. The admissions by the Respondent, together with the records introduced at the hearing by the Florida Real Estate Commission show that Respondent was a licensed real estate broker holding license no. 0122293.

   
   

2. The Respondent admitted his participation in all the transactions referenced in the administrative complaint.

   
   

3. The bank records and other evidence introduced at the hearing show that the Respondent's escrow account maintained at Liberty Bank of Cantonment lacked sufficient funds to pay the bills which Respondent admitted were owed Lawyers Title Insurance Co. in the amount of $44.00. The Respondent testified that he had paid these bills only two days before the instant hearing with a check on his personal bank account. From the Respondent's testimony, it is clear that he failed to maintain sufficiently detailed records to permit him to account for monies in his escrow account in the Liberty Bank of Cantonment and in the bank account which he maintained with the First State Bank in Pensacola, Florida.

   
   

4. The closing statements relating to the Netzer/Hayes transaction showed that the Respondent received $1,225.00. His records for this transaction showed checks on his escrow account relating to this transaction in the amount of

   $1,481.60. Respondent testified that the error in this transaction occurred when he erroneously stubbed one check as relating to the Netzer/Hayes transaction, when in actuality it related to a separate transaction. However, under cross examination the Respondent could not identify the transaction to which this check related.

   
   

5. The Respondent admitted depositing the money involved in the Netzer/Hayes transaction to his Cantonment Liberty Bank escrow account. He also admitted that he had made no transfer of funds from the Cantonment bank account to his First State Bank account. The Respondent admitted and the evidence indicates that payments were made at closing from the First State Bank account. The Liberty Bank account records show a balance of less thank $731.00 at all times after 9-30-76. Therefore, insufficient funds were maintained by the Respondent in the Liberty Bank escrow account to satisfy the obligations on the account arising from the Nitzer/Hayes transaction. Furthermore, the Respondent's handling of escrow account at the Liberty Bank in Cantonment was as it related to this transaction was improper

   
   

6. The admissions of Respondent and the evidence introduced showed that he was the broker involved in the Suttles/ Kamplain transaction. No evidence was introduced that the Respondent failed to advise Suttles that he initially had accepted a $250.00 note in lieu of cash as an earnest money deposit. The evidence is clear that upon receipt of the money, the Respondent deposited this money to his account in the First State Bank of Pensacola. Although this account was not designated an escrow account, it did bear the designation of a management account. It was not established by substantial and competent evidence that a management account was not an escrow account. The Suttles/Kamplain

   transaction closed without problem; however, there is no explanation of the disbursement of the $250.00 received as an earnest money deposit in the records of this transaction.

   
   

7. Regarding the Suttles/Gordon transaction, it was established that the Respondent was the broker who handled this transaction. No substantial and competent evidence was produced that the Respondent failed to disclose to the Gordons that he did not obtain an initial $100.00 deposit on the transaction. The record is clear that the Respondent did receive a check in the amount of

   $1,500.00 from Mr. Suttles which the Respondent deposited to his account in the First State Bank. The Gordons did testify that the Respondent was authorized to allow the Suttles to occupy the premises prior to closing. After occupying the property, the Suttles were to make rental payments to be credited to the payment of the mortgage. After moving into the house, Mr. Suttles and his wife began to have domestic problems, and he immediately ceased to make all rental payments upon the property. Mr. Suttles did not advise the Respondent that he was not making payments and did not intend to make further payments on the house. Mr.

   Suttles did avoid all of Respondents efforts to contact him. The Suttles and the Gordons did execute the closing papers but by the time the papers were executed, Mr. Suttles failure to make the rental payments had caused a deficiency in payment of the mortgage. Because the mortgage was in arrears, the transaction could not close. When the Respondent became aware of the Suttles' separation, he began to make arrangements to have them vacate the Gordon house. However, Respondent failed to keep the Gordons fully advised as to the statuts of this transaction. Further, the check given to the Gordons by Respondent was not honored by the First State Bank of Pensacola because of insufficient funds in the Respondent's account to meet this obligation. The Respondent retained and disbursed portions of the $1,500.00 deposited to the account, although the transaction did not close. Money was disbursed to the Gordons and Respondent took out his commission. Whether Respondent was not entitled to disburse the monies under the contract between Respondent and the Gordons cannot be determined upon the evidence presented. However, it is clear that Suttles was a bona fide purchaser, who after he entered into occupancy, determined that he would not complete the transaction; and under the terms of the contract between the Respondent and the Gordons, the Respondent earned his commission when a purchaser was obtained. It is clear that the Respondent did not keep the Gordons properly advised of the situation regarding the sale of their house to the Suttles; and that the Respondent's check to the Gordons on the First State Bank was not honored because the account was impaired.

   
   

8. The evidence and testimony taken as a whole at the hearing shows that Respondent did not keep a running balance of the accounts which he maintained at the Liberty Bank of Cantonment or the First State Bank of Pensacola. The evidence further shows that the Respondent failed to withdraw commissions earned in their total amount subsequent to closings on property, did not pay bills which closing statements indicate he was obligated to pay, permitted inter-bank transfers of funds owed him by banking institutions to his escrow or management account, did not take steps to ensure that the First State account was properly and clearly titled as an escrow account, did not properly annotate withdrawals from his escrow accounts, and failed to maintain money in his escrow account until it was disbursed.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Florida Real Estate Commission has jurisdiction to determine the issues involved in this complaint.

10. The Florida Real Estate Commission has charged Respondent with violation of Section 475.25(1)(a) and (i), Florida Statutes.

    
    

11. The testimony and evidence presented in the formal hearing show that the Respondent was culpably negligent in the maintenance of his escrow accounts and records relating to them. Because of his negligence, monies in the escrow accounts were not maintained until disbursed. This constitutes violation of both 475.25(1)(a) and (i), Florida Statutes.

    
    

12. The Respondent's course of conduct in the maintenance of these accounts, and in the maintenance of the records related to these transactions indicates Respondent is unable to be entrusted in a fiduciary relationship with the money of others, Therefore, Respondent is in violation of Section 475.25(2), Florida Statutes.

RECOMMENDATION

The record taken as a whole indicates that the violations for which the Respondent is responsible are the result of his culpable negligence as opposed to any dishonest or fraudulent act. However, the Respondent is so devoid of any knowledge of his responsibilities with regard to monies entrusted to him that he may not safely be permitted to function as a real estate broker. Based upon the foregoing-findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the license of Respondent as a registered real estate broker.

DONE and ORDERED this 9th day of March, 1978, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Robert Pierce, Esquire

Florida Real Estate Commission

400 West Robinson Avenue Orlando, Florida 32801

O. E. Adams, Esquire Post Office Box 12217 Pensacola, Florida 32002

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AGENCY MEMORANDUM

=================================================================

Orlando, Florida November 27, 1978

MEMORANDUM

TO: Renata Hendrick, Registration Supervisor FROM: Manuel E. Oliver, Staff Attorney

RE: PD 3267 (PD 15776) FREC vs. Ralph D. Villeneuve t/a Don's Realty 122293-1

DOAH Case No. 78-091

Please find enclosed copies of the Final Order filed on April 13, 1978, in the reference case together with the opinion filed on November 2, 1978 by the District Court of Appeal, First District of Florida, affirming the Commission's Order, as well as a copy of the mandate issued by said Court on November 20, 1978. By virtue of the foregoing, the order of the Commission revoking defendant's registration has become firm and effective in all respects.

Please make the necessary annotations in the records for all effects.

Manuel E. Oliver Staff Attorney

MEO/km Enclosures:*

* NOTE: Enclosures noted in this memorandum are not available at the division and therefore not a part of this ACCESS document.

Docket for Case No: 78-000091

Orders for Case No: 78-000091