STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 79-034

) CINDY REALTY OF HERNANDO, INC., ) and WILLIAM COLELLO, )

)

Respondents. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice in New Port Richey, Florida, on March 21, 1979, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an administrative complaint filed by the Florida Real Estate Commission against Cindy Realty of Hernando, Inc., and William Colello alleging that the Respondents had violated the provisions of Section 475.25(1)(d) and (i), Florida Statutes. The issues presented are:

1. Whether the Respondent failed to deposit money received from Rex and Mary Davis to an escrow account and to maintain said money in an escrow account until authorized to disburse it; and

   
   

2. Whether the Respondent failed to account for money received from Rex and Mary Davis upon demand.

APPEARANCES

For Petitioner: Fred Langford, Esquire

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: Stephen C. Booth, Esquire

1604 U.S. Highway 19, North

New Port Richey, Florida 33552 FINDINGS OF FACT

1. Although the Respondent admitted to the allegations in Paragraph 1 of the administrative complaint, Cindy Realty of Hernando, Inc., was not at all times relevant to this complaint a registered corporate broker, because it was not registered until September 16, 1978. William Colello is and was at all times relevant to this complaint the active real estate broker for Cindy Realty of Hernando, Inc.

   
   

2. William Colello, as President of Cindy Enterprises, Inc., a residential contracting company, entered into a contract for sale of certain real estate to

   Rex and Mary Davis. Cindy Enterprises, Inc., was the owner of subject property, and William Colello as the real estate broker had no involvement in this contract and the transaction. Cindy Realty of Hernando, Inc., did not exist as a registered real estate broker as of the date of the contract.

   
   

3. Mary Davis gave William Colello a check for $500, on which the payee was blank, as a deposit on the transaction. Colello kept this check for a period of days without depositing it to the account of Cindy Enterprises, Inc. Colello was then advised by his secretary/bookkeeper that money was needed in the Cindy Realty operating account. Colello directed her to take the Davis' deposit check and deposit it to the Cindy Realty operating account, and to show a loan from Cindy Enterprises, Inc., to Cindy Realty of Hernando, Inc., on the books of Cindy Realty. This was done.

   
   

4. Subsequently, the sale of the real property between Cindy Enterprises, Inc., and the Davis' failed to close, with both parties charging the other with defaults on the contract. The Davis' then made demand for the return of their deposit, and Colello refused.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Florida Real Estate Commission charges Cindy Realty of Hernando, Inc., and William Colello with violation of Section 475.25(1)(d) and (i), Florida Statutes. Section 475.25(1)(i), supra, relates to the disciplining of a broker for his failure to deposit upon receipt monies received by him from any person dealing with him as a broker, and maintaining such monies in escrow until disbursement is properly authorized. Section 475.25(1)(d) relates to the failure of a broker to account for or deliver monies which he has placed in escrow, and which he is not entitled in law or in equity to retain.

   
   

6. The key fact in resolving the charges in this case is that the transaction out of which the charges arise was one between Cindy Enterprises, Inc., a contracting company, William Colello, its president, and Rex and Mary Davis. Cindy Realty of Hernando, Inc., and William Colello, as a real estate broker, were not parties to this transaction. The money was delivered to Colello as President of Cindy Enterprises, Inc. The money was deposited to Cindy Realty's operating account as a business loan from Cindy Enterprises, Inc. The obligations created by Section 475.25(1)(i) are specifically limited to monies entrusted to a broker by any person dealing with him as a broker. Colello did not participate in the instant transaction as a broker. In fact, it would have been a violation of the duties of an escrow agent for Colello to have intermingled the funds of Cindy Enterprises, Inc., with the funds in the escrow account of Cindy Realty of Hernando, Inc.

   
   

7. Because there was no duty for Colello, as a broker, to deposit the $500 to the escrow account, there is no duty to account for or deliver the money pursuant to Section 475.25(1)(d), supra.

   
   

8. The issues relating to the contract between Cindy Enterprises, Inc., and the Davis', the terms of that contract, and who defaulted on that contract are beyond the scope of this proceeding, are beyond the authority of the Florida Real Estate Commission to adjudicate, and are irrelevant and immaterial to the charges brought by the Florida Real Estate Commission.

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 Cindy Realty of Hernando, Inc., and William Colello as real estate brokers.

DONE and ORDERED this 30th day of April, 1979, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Fred Langford, Esquire

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Stephen C. Booth, Esquire 1604 U.S. Highway 19, North

New Port Richey, Florida 33552

Docket for Case No: 79-000034

Orders for Case No: 79-000034