STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, )

BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 80-1363

) PD 18228

CHERRY MAJORS )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, P. Michael Ruff, held a public hearing in the above- styled cause on October 3, 1980 at Pensacola, Florida.

APPEARANCES

For Petitioner: S. Ralph Fetner, Jr., Esquire

Department of Professional Regulation 2009 Apalachee Parkway

Tallahassee, Florida 32301

For Respondent: Cherry Majors, pro se

223 Topaz Drive Pensacola, Florida 32505

and

1925 North "P" Street Pensacola, Florida 32505

By Administrative Complaint filed June 4, 1980, the Department of Professional Regulation, Petitioner, seeks to revoke, suspend or otherwise discipline real estate licensee Cherry Majors who holds License No. 61077. The Petitioner alleges that the Respondent is guilty of fraud, misrepresentation, false promises and breach of trust, and was responsible for the failure to deliver a title insurance policy and a warranty deed to one Edward Simmons, the purchaser of a parcel of property, the sale of which the Respondent was responsible for as listing agent. Specifically, the Petitioner is charging the Respondent has thus violated Sections 475.25(1)(a) and (c), Florida Statutes (1978 Supp.) and Sections 475.25(1)(h) and (d), Florida Statutes (1979). The issue thus is whether the Respondent failed to deliver the subject warranty deed and title insurance policy and, if so, whether any violation of the above-cited statutory authority resulted.

The Petitioner presented two witnesses in its case in chief, and one rebuttal witness. The Respondent presented one witness.

FINDINGS OF FACT

1. On approximately March 4, 1978 the Respondent, Cherry Majors, entered into a contract for the sale of two lots in Escambia County, Florida with the complaining witness, Edward Simmons. Under the terms of the contract of sale the Respondent agreed to provide a policy of title insurance, a warranty deed, and to pay all closing costs. The closing of the subject sale was held March 7, 1978 at which time the complaining witness, Edward Simmons, gave the Respondent

   $6,500.00 cash which remained to be paid pursuant to the contract of sale. She, in turn, provided him with a receipt. The deed was duly executed by the Respondent, recorded by her on March 23, 1970, and placed in the hands of the title company. The property was sold to Edward Simmons subject to a judgment against the Respondent seller in the amount of $2,414.48. That judgment was satisfied, however, on March 28, 1970. After repeated unsuccessful attempts by the complaining witness to contact the Respondent regarding the deed and title policy, the complaining witness ultimately filed a complaint with the Florida Real Estate Commission on December 29, 1978. The title insurance company was paid its premium of $100.00 for the subject policy of title insurance on January 23, 1979 by the Respondent and, ultimately on February 13, 1979, the title insurance company forwarded the owner's title insurance policy and the original warranty deed to Mr. Simmons. The warranty deed was held by the title insurance company for approximately ten months after the closing of the transaction, for the reason that the title insurance premium had not yet been paid by the Respondent. The testimony of the title insurance company's representative establishes, however, that the title policy binder was issued March 6, 978, and the actual title policy was issued by the company March 23, 1978.

   
   

2. Thus, the warranty deed was recorded in the official Records of Escambia County shortly after the subject closing, and the title policy was issued shortly thereafter in the name of the new owner of the property, Mr. Simmons. Evidence of title in the name of Mr. Simmons was established in the appropriate public records soon after the closing. Mr. Simmons, however, did not actually take physical possession of his deed for some ten months due to the retention of it by the title insurance company for the above-mentioned reason. The Respondent executed the deed to Mr. Simmons and obtained its recording, establishing fee simple ownership of the subject property by Mr. Simmons at that point, although she then returned the deed and title policy to the title insurance company for holding until the title insurance premium was paid by the Respondent, and until the Respondent recorded satisfaction of the above- referenced judgment. The record does not reveal when the satisfaction of the judgment was recorded although the satisfaction itself was dated March 28, 1978, shortly after the closing. Sometime prior to February 13, 1979, however, the title insurance premium was paid and the satisfaction of judgment recorded, because on that date the owner's title insurance policy and the warranty deed were finally transferred to Mr. Simmons.

   
   

   CONCLUSIONS OF LAW

   
   

3. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

4. Section 475.25(1)(a) and (c) , Florida Statutes (1978 Supp.), and Section 475.25(1)(b) and (d), Florida Statutes (1979), provides in pertinent part that the Board may suspend or revoke a license or impose an administrative fine if it finds that the registrant has:

   
   

   1. Been guilty of fraud, misrepresent- ation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction . . . or,

      (c) Failed to . . . deliver to any person at the time which has been agreed upon

      or is required by law any document or thing of value which is not his property or which he is not in law or equity

      entitled to retain under the circumstances.

      
      

5. There is no question that the purchaser, Mr. Simmons, did not receive his title insurance policy, nor his warranty deed for approximately ten months following the closing of the sale of the subject property. The Respondent, however, recorded the deed within a short and reasonable length of time following the closing, but then returned it to the title company who held the deed for almost ten months because they failed to receive the premium for the title insurance policy. There is no explanation in this record justifying the title insurance company's retention of the purchaser's warranty deed during this period of time merely because they had not received payment for the title insurance policy. They had other means of redress against the person who ordered and agreed to pay for the policy, to wit: the Respondent, but instead insisted on retaining the warranty deed instead of forwarding it to the purchaser. No explanation was offered in this record to show why the Respondent delivered the warranty deed to the title insurance company in the first place after having it recorded, instead of following the common and acceptable practice of delivering the warranty deed to the purchaser who is, himself, responsible for recording. Thus, the competent, substantial evidence in this record shows that the delay in the receipt of the deed by the purchaser was not in large part due to the action of the Respondent; however, there is no justification offered for the Respondent's failure to deliver the deed into the hands of the purchaser at closing for the purchaser's recording and retention of the deed, as is the normal practice.

   
   

6. Regarding the other charge of failure to deliver the title insurance policy to the purchaser, there is no question but that the Respondent was contractually obligated to purchase, obtain and deliver to the purchaser a policy of title insurance covering the premises conveyed. There is no question but that she duly had prepared appropriate evidence of marketable title in the form of a title insurance policy, even to the extent of obtaining a satisfaction of an outstanding judgment, although she was responsible for and failed to timely record that satisfaction. It is equally true, however, that the title insurance policy was never delivered to the purchaser of the property until approximately ten months after closing because the title insurance company did not receive its premium. Although the title insurance company was partly responsible for the failure of the subject documents to be delivered to the purchaser of the property, there is no question but that the proximate cause of the failure to deliver stemmed from the Respondent's failure to act and perform those contractual obligations she agreed to perform, even though it may be likely that the title company incurred liability for failure to deliver the

   essential elements of title to the purchaser in an unjustifiable way. The Respondent could have averted these consequences had she made arrangements to pay the premium in a timely manner, and oversee the recording of the deed and the subsequent issuance of the permanent title insurance policy to the purchaser, together with the deed. There is no question that based on the testimony and evidence in this record, especially the candid testimony of the Respondent herself, that she did not intend to mislead, misrepresent or otherwise deal dishonestly with the purchaser of the property, hut that she merely overlooked or forgot the fact of the failure of delivery of the deed and the title insurance policy for many months, as well as the fact that this omission may have been occasioned (although wrongfully on the title company's part) by her concomitant failure to pay the title insurance premium. This haphazard, disorganized transaction doubtless stemmed from the severe personal, domestic difficulties the Respondent was experiencing during all times pertinent hereto involving her daughter's custody battle with regard to the Respondent's grandchildren and the related breakdown of postal communications occasioned by the change of the Respondent's residence on three different occasions between the time of the subject real estate closing and the time when the deed and title policy were ultimately transferred.

   
   

7. Thus, a1though the Respondent is not guilty of any intentional conduct within the purview of the above-referenced statutory criteria, she must be held to be guilty of culpable negligence within the ambit of the above-cited statute. The exculpatory factors alluded to above involving the Respondent's turbulent domestic life during the relevant period of time certainly demonstrate that the Respondent, due to emotional stress, was not functioning during and after the subject transaction at her peak level of professional performance, but the resolution of those domestic problems and the experience of the Respondent in the prosecution of this case indicates to the satisfaction of the Hearing Officer that the diminished level of professional responsibility and conduct was a transitory deviation from the statutorily and professionally accepted modes of real estate practice, and which dictate moderation in the assessment of a penalty.

   
   

8. On consideration of the foregoing Findings of Fact and Conclusions of Law, it is concluded that competent, substantial evidence has been presented which will sustain a finding of culpable negligence as envisioned by the above- cited authority, and which constitutes proof of substantial causes or reasons justifying assessment of a monetary penalty against the Respondent. For the mitigatory reasons alluded to above, no substantial justification has been presented to the undersigned to justify revocation or suspension of the Respondent's license based on these charges.

RECOMMENDATION

It is, therefore, recommended that the Respondent be found guilty of culpable negligence pursuant to Section 475.25(1)(b), Florida Statutes (1979), and guilty of a violation of Section 475.25(1)(d), Florida Statutes (1979), for failure to deliver the subject documents, and fined the sum of $250.00, of which

$150.00 should be suspended and held in abeyance, but which such $150.00 portion of the fine will become immediately due and owing should the Respondent be convicted of any similar violations under the statutory authority above-cited at any time within a period of five (5) years hence.

DONE and ENTERED this 26th day of November, 1980, in Tallahassee, Leon County, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of November, 1980.

COPIES FURNISHED:

S. Ralph Fetner, Jr., Esquire Department of Professional Regulation 2009 Apalachee Parkway

Tallahassee, Florida 32301

Ms. Cherry Majors

223 Topaz Drive Pensacola, Florida

and

1925 North "P" Street Pensacola, Florida 32505

Nancy Kelly Wittenberg, Secretary Department of Professional Regulation 2009 Apalachee Parkway

Tallahassee, Florida 32301

Docket for Case No: 80-001363

Orders for Case No: 80-001363