STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 78-2225

)

GLEN H. MILLER, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice in Ocala, Florida, on February 19, 1979, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings.

This case was presented upon an Administrative Complaint filed by the Florida Real Estate Commission against Glen H. Miller alleging that Miller had violated Sections 475.25(1)(a)(d) and (i), Florida Statutes.

The allegations in this complaint arise out of a real estate transaction in which Miller was the real estate broker, and it is alleged that he violated the aforementioned statutes by improperly disbursing monies from his escrow account.

The issue presented is whether Glen H. Miller violated Sections 475.25(1)(a)(d) and (i), Florida Statutes.

APPEARANCES

For Petitioner: Mark A. Grimes, Esquire

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32801

For Respondent: Harvey R. Klein, Esquire

333 Northwest 3rd Avenue Ocala, Florida 32670

FINDINGS OF FACT

1. Glen H. Miller is a registered real estate broker holding license #0060204 issued by the Florida Real Estate Commission.

   
   

2. Miller was the registered real estate broker in a transaction between David and Marsha Ewan, and Roy and Marilyn Cutrell. Miller prepared a contract for sale and purchase of real estate, Exhibit #5, for Roy and Marilyn Cutrell as buyers and presented it to Marsha and David Ewan, as sellers. The terms regarding the mortgage to be assumed in Paragraph B in Section 2 were based upon information given Miller by the Ewans when the property was listed. It is uncontroverted that as of the date the contract was prepared Miller had no

   knowledge that Ewan had refinanced the house and the mortgage terms had changed. This contract was presented in the presence of the Cutrells to the Ewans on January 20 or 21, 1977.

   
   

3. There is a controversy as to when the Cutrells became aware the mortgage terms were different from those stated in the contract. The Ewans testified that they told the Cutrells the terms were different after the contract had been signed by both parties but not in Miller's presence. The Cutrells stated that they learned the mortgage terms were different when they inquired about the mortgage to Fidelity Federal Savings and Loan, holders of the mortgage. This occurred on January 24, 1977. In either event, both parties agree that Miller had no knowledge of the change in the terms of the mortgage until January 24. Miller prepared and presented a new contract to the Ewans and Cutrells which correctly reflected the mortgage data. The Cutrells represented to Miller and the Ewans that they did not consider the mortgage terms important and did not desire to sign the revised contract. The Ewans did not insist upon the revised contract.

   
   

4. Subsequently, the Cutrells failed to deliver the additional deposit of

$14,000 on February 1, 1977. Their reasons for failure to do so had nothing to do with the amount of the mortgage or the terms thereof. The Cutrells were advised by Miller's wife, a real estate salesman, that they would be in default if they did not deliver the $14,000 additional deposit and if they defaulted they would lose their initial $1,000 deposit. The Cutrells did not contest the forfeiture of their initial deposit and advised that they did not wish to complete the transaction. On February 4, 1977, a check was prepared by the broker to the Ewans in the amount of $700. The Ewans picked this check up on February 7, 1977. The remaining $300 was retained in the escrow account at all times. The Cutrells first demanded the return of the deposit orally on February

1. The subsequently made written demands on February 23, 1977.

   
   

   1. Between the oral demand and the written demand, the broker reported the controversy existing with the Cutrells to the Florida Real Estate Commission, which eventually resulted in these charges being brought.

      
      

      CONCLUSIONS OF LAW

      
      

   2. The Florida Real Estate Commission charges that Glen Miller violated Sections 475.25(1)(a), (d) and (i), Florida Statutes. Section 475.25(1)(a), Florida Statutes, relates to fraudulent, dishonest dealings and culpable negligence. There is nothing in this record that shows Miller made any false or fraudulent representations to the Cutrells or Ewans, or that he was negligent in preparing the contract.

      
      

   3. Section 475.25(1)(i) relates to the deposit of monies to a broker's escrow account, maintaining monies in escrow, and disbursements of escrow monies. Specifically, Section 475.25(1)(i), supra, requires a broker to promptly deposit monies into escrow and maintain those monies in escrow until authorized to disburse them. There is no allegation in the complaint that Miller failed to promptly deposit the monies involved into his escrow account. Section 475.25(1)(d), supra, deals with violating other provisions of the real estate law. It is not applicable unless a violation of Section 475.25(1)(a) or

      (i) is proven, in which case it is superfluous.

      
      

   4. The facts clearly show that the buyers became aware of the error in mortgage terms shortly after they entered into the contract. Although they were given the opportunity to enter into a revised contract correctly stating the

      terms of the mortgage, they refused to do this representing that they did not care about assuming the mortgage. Under the facts presented, the original contract was not abrogated, but the Cutrells waived any rights under the provisions of Section 2 of the contract to assume the mortgage at the terms therein stated. These terms they declared not to be important to their consideration of the contract, and they accepted all the remaining provisions thereof.

      
      

   5. The contract had specific terms regarding default. The provisions of Paragraph U provide that if the buyer fails to perform under the contract within the specified time, the deposit paid by the buyer may be retained by and for the account of the seller as liquidated damages, consideration for execution of the contract, and in full settlement of any claims. Therefore, under the terms of the contract, the escrow agent, Miller, was to account to the seller for the escrow deposit as liquidated damages, consideration for the execution of the contract, and in settlement of any claims arising under the contract. Had the broker not accounted and delivered the monies, he could have been charged by the seller for failing to deliver contrary to the provisions of Section 475.25(1)(c), Florida Statutes. Further, as of the date of disbursement, the buyer had made no demand for the return of the escrow deposits; therefore, there were no conflicting demands for the money. There was no violation of Section 475.25(1)(a) or (i), Florida Statutes.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the Florida Real Estate Commission take no action against the registration of Glen H. Miller as a registered real estate broker.

DONE and ORDERED this 13th day of April, 1979, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

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

(904) 488-9675

ADDENDUM

The Hearing Officer has read and considered the Proposed Findings of Fact and Conclusions of Law submitted by Petitioner, Florida Real Estate Commission. The facts presented in the Recommended Order are based on Substantial and competent evidence contained in the record.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings

COPIES FURNISHED:

Mark A. Grimes, Esquire Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32801

Harvey R. Klein, Esquire

333 NW 3rd Avenue Ocala, Florida 32670

Docket for Case No: 78-002225

Orders for Case No: 78-002225