STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, BOARD ) OF REAL ESTATE, )

)

Plaintiff, )

)

vs. ) CASE NO. 79-744

)

JAMES E. BLACK, )

)

Defendant. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this case on June 27, 1980, in Tampa, Florida.

APPEARANCES

For Plaintiff: John Huskins, Esquire

Department of Professional Regulation 2009 Apalachee Parkway

Tallahassee, Florida 32301

For Defendant: Gwynne A. Young, Esquire

Post Office Box 3239 Tampa, Florida 33601

By Administrative Complaint dated November 22, 1978, the State of Florida, Board of Real Estate ("Plaintiff") charged James E. Black ("Defendant"), with failure to refund an earnest money deposit on demand; failure to place an earnest money deposit in an escrow account; misrepresenting the identity of the seller in a real estate transaction; and misrepresenting the status of title to a parcel of real estate; all allegedly in violation of Section 475.25(1)(a) and (c), Florida Statutes. The Defendant disputed the allegations of fact contained in the Administrative Complaint, and requested a formal hearing, pursuant to Section 120.57(1), Florida Statutes. Thereafter, by letter dated March 28, 1979, Plaintiff requested that a Hearing Officer from the Division of Administrative Hearings be assigned to conduct the hearing in this case. Final hearing was scheduled for June 27, 1980 by Amended Notice of Hearing dated May 15, 1980.

At the final hearing in this cause, Plaintiff called John M. Aviles, Frances G. Williams, Frances Elizabeth Williams, and Norman Ricker as its witnesses. Plaintiff offered Plaintiff's Exhibits Nos. 1, 2, 4, 5, 6, 7 and 8, which were received into evidence. The Defendant testified in his own behalf and offered Defendant's Exhibits Nos. 1 and 2, which were received into evidence.

The Administrative Complaint filed herein contains four counts. At final hearing, Plaintiff voluntarily dismissed Counts III and IV.

FINDINGS OF FACT

1. At all times material hereto, Defendant was registered with Plaintiff as an active broker, holding certificate NO. 0182756.

   
   

2. On or about October 4, 1976, a Contract for Sale of Real Estate ("the contract") was entered into between Merit Properties Corporation as seller, Frances G. Williams ("the buyer") as buyer, and Defendant as "agent." The contract was for purchase and sale of certain real property and improvements located in Tampa, Florida. The contract provided that purchase of the property was contingent upon the buyer qualifying for and obtaining an FHA mortgage in the amount of $20,850.

   
   

3. At the time the contract was signed, the Defendant obtained a $300.00 deposit from the buyer, and at some later date, accepted an additional deposit of $550.00, making a total deposit of $850.00 toward the purchase price of the property. The contract provides that the deposit shall apply as part of the purchase price of the property "...and shall be held by said Agent in escrow pending closing of [the] transaction..."

   
   

4. In addition, the contract provides that upon closing of the transaction "[t]he Seller agrees to pay said Agent a sum equal to 7 percent of the purchase price as commission...." Finally, the contract contained a provision indicating that "[n]o agreements, unless incorporated in this contract shall be binding upon the Agent, Buyer, or, Seller."

   
   

5. Sometime in late 1976, the buyer applied to Mortgage Associates, Inc. for an FHA mortgage. On or about November 5, 1976, this application was rejected.

   
   

6. On or about November 29, 1976, the buyer again applied for an FHA mortgage, this time through Charles F. Curry and Company. This mortgage application was rejected on December 10, 1976. Defendant was aware that the buyer had applied for an FHA mortgage through Charles F. Curry and Company. Written notification of rejection of the buyer's application through this company was sent to the buyer, but a copy was not forwarded by Charles F. Curry and Company to Defendant. The record establishes, however, that Charles F. Curry and Company's general practice was to notify real estate brokers involved in financing transactions of the disposition of mortgage loan applications. Defendant denies receiving any such notification from Charles F. Curry and Company.

   
   

7. On several occasions, after the aforesaid rejections of the buyer's mortgage loan applications, the buyer attempted to contact Defendant by telephone, but was unsuccessful in these attempts. Subsequently, on February 21, 1977, the buyer orally advised Defendant that her mortgage loan application had been rejected, and requested return of her $850.00 deposit.

   
   

8. When Defendant did not return the deposit, the buyer retained an attorney to assist her in recovering her deposit. Finally, pursuant to a Compromise and Settlement Agreement dated September 5, 1978, Defendant returned the buyer's deposit of $850.00, together with an additional $100.00 as accrued interest. However, of this $950.00 total, the buyer received only $650.00. The

   remaining $300.00 constituted a fee which the buyer had to pay to her attorney for services rendered in recovering the deposit.

   
   

9. Defendant was a substantial owner of Merit Properties Corporation, the purported seller of the real property here involved. Evidence of record in this proceeding clearly establishes that Defendant did not deposit the $850.00 earnest money deposit received from the buyer in an escrow account maintained either in his own name or in the name of Merit Properties Corporation. In fact, Defendant admits that the $850.00 deposit was used to make improvements to the real property which was the subject matter of the contract.

   
   

10. Defendant contends that he received the earnest money deposit from the buyer as an officer of Merit Properties Corporation, and that he had an oral understanding with the buyer entered into prior to the execution of the contract that the money so received would note be held in escrow, but would be used to make improvements on the property. These contentions are not supported by the evidence and are specifically rejected. The record clearly establishes that during negotiations leading to the signing of the contract, Defendant informed the buyer that he was a real estate broker. In addition, the record also establishes that Defendant prepared the contract, and was therefore responsible for the wording of that document. The contract clearly provides that Defendant acted as "agent" for Merit Properties Corporation, and that as such, he was to receive a 7 percent commission on the purchase price at the closing of the transaction. By the very terms of the contract, therefore, Defendant was acting in the capacity of a real estate broker in this transaction. In addition, the contention that there existed an oral agreement between Defendant and the buyer prior to the signing of the contract to use the deposit money for construction purposes is not supported by the evidence of record in this proceeding, and, in fact, is directly contrary to the language contained in the contract document prepared by Defendant.

    
    

11. Finally, Defendant contends that he never refused to return the buyer's deposit, but informed her that the deposit would be returned upon the buyer furnishing to Defendant both a copy of correspondence rejecting the buyer's mortgage loan application, and a "release." There is no provision in the contract involved in this transaction which would require the buyer to furnish Defendant any sort of "release", or to furnish notice of inability to obtain the necessary financing in any specific form. Thus, oral demand for return of the deposit was clearly permissible under the terms of the contract. Further, Defendant was aware of the fact that the buyer had applied for mortgage financing through Charles F. Curry and Company, and therefore could either have obtained a copy of the rejection of the buyer's mortgage loan application himself had he chosen to do so, or could at the least have inquired of that company as to the disposition of the buyer's application.

    
    

12. Both Plaintiff and Defendant have submitted Proposed Findings of Fact for consideration by the Hearing Officer. To the extent that those proposed findings of fact have not been adopted in this Recommended Order, they have been rejected as either not having been supported by the evidence, or as having been irrelevant to the issues in this proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.57(1) and 120.60, Florida Statutes.

14. Section 475.25(1), Florida Statutes, as it existed at the time of the transaction involved in this proceeding provided that:

    
    

    The registration of a registrant may

    be suspended for a period not exceeding

    2 years, or until compliance with a lawful order imposed in the final order of suspension, or both, upon a finding

    of facts showing that the registrant has:

    1. Been guilty of fraud, misrepre sentation, concealment, false promises, false pretenses, dishonest dealing, trick, scheme or device, culpable negligence,

       or breach of trust in any business trans action, in this state or any other state, nation, or territory; [or] has violated a duty imposed upon him by law or by the

       terms of a listing contract, oral, express or implied, in a real estate transaction It shall be immaterial to the guilt

       of the registrant that the victim, or intend ed victim, of the misconduct has sustained no damage or loss or the damage or loss has

       been settled and paid, after discovery of the misconduct, or whether such victim, or intended victim thereof, was a customer or a person in confidential relation with the registrant, or was an identified member of the general public; or,

    2. Failed to account or deliver to any person any personal property such as money, fund, deposit, check, draft ... or thing of val

       ue, which has come into his hands and which

       is not his property, or which he is not in law or equity entitled to retain, under the circum stances, and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery; provi ded, however, that, if the registrant shall, in good faith, entertain doubt as to his duty to account and deliver said property and he has not appropriated the property to his own use or intermingled it with his own property of like kind, he may notify the commission promptly, truthfully stating the facts, and ask its ad vice thereon, or after notice thereof to the commission, shall promptly submit the issue to arbitration by agreement of all parties, or inter-plead the parties, or otherwise seek an adjudication of the question in the proper court and shall abide, or offer to perform,

       the advice of the commission or the orders of the court or arbitrators, no information against him shall be permitted to be maintained ....(Emphasis added)

15. Based upon the foregoing Findings of Fact, it is concluded as a matter of law that Defendant has violated the above quoted provisions of Section 475.25(1), Florida Statutes, and that his real estate broker's license should be suspended for a period of sixty (60) days.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That a final order be entered by the State of Florida, Board of Real Estate, suspending Defendant's real estate broker's license No. 0182756 for a period of sixty (60) days from the date of final agency action in this proceeding.

DONE and ENTERED this 21st day of July, 1980, in Tallahassee, Florida.

WILLIAM E. WILLIAMS

Hearing Officer

Division of Administrative Hearings

101 Collins Building Tallahassee, Florida 32301 (904) 488-9675

COPIES FURNISHED:

John Huskins, Esquire Department of Professional

Regulation

2009 Apalachee Parkway

Tallahassee, Florida 32301

Gwynne A. Young, Esquire Post Office Box 3239 Tampa, Florida 33601

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

AGENCY MEMORANDUM

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

DEPARTMENT OF PROFESSIONAL REGULATION

2009 Apalachee Parkway

Tallahassee, Florida 32301

Telephone 904-488-6692 MEMORANDUM

TO: C. B. Stafford, Executive Director, Board of Real Estate

E. B. Ashley, Administrator on Investigations FROM: John Huskins, Assistant General Counsel

SUBJECT: FINAL ACTION - Suspension PD 3402 (DOAH 79-744)

James E. Black, Broker 182756-1 DATE: February 6, 1981

This is to advise you that by FINAL ORDER dated September 15, 1980 (copy attached) the license of James E. Black was suspended for six (6) months, effective October 16, 1980, provided no appeal was taken. Black did appeal.

January 21, 1991 the Appellate Court entered its ORDER dismissal of appeal (copy attached), therefore, suspension became effective immediately.

Broker Black, through his lawyer, delivered to me Black's

1. Certificate Number: 182756, as individual broker

2. Certificate Number: 182755, as corporate-Best Opportunity Realty Corporation.

both of which are attached to this memo to C. B. Stafford.

It is suggested that revocation records be updated to reflect suspension and the effective date.

It is further suggested that investigation be made as necessary to determine if James E. Black is in fact refraining from real estate activities, in compliance with his suspension.

JH/pkr Enclosures*

cc: Mr. Michael Schwartz, General Counsel Susan Penquite, Central Files

Mr. Fred Wilson, Assistant General Counsel Ms. Renata Hendrick, Supervisor of Records

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

Docket for Case No: 79-000744

Orders for Case No: 79-000744