STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 80-1832

)

ELIZABETH E. TICE )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before P. Michael Ruff, Hearing Officer with the Division of Administrative Hearings, on an administrative complaInt filed by the Department of Professional Regulation, Petitioner. The Petitioner seeks to suspend or revoke Real Estate License No. 0089060 held by the Respondent or to otherwise take disciplinary action against the Respondent as a licensed real estate broker.

APPEARANCES

The parties were represented by:

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

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Harry A. Blair, Esquire

2149 McGregor Boulevard Post Office Box 1467

Fort Myers, Florida 33901

By administrative complaint filed October 7, 1980, the Petitioner seeks to revoke or suspend the license of, or otherwise discipline the Respondent, charging that the Respondent has committed fraud, misrepresentation, concealment, dishonest dealing, culpable negligence and all the other types of misconduct enumerated in Section 475.25(1)(a), Florida Statutes (1977) amended as Section 175.25(1)(b), Florida Statutes (1979). Specifically, the Respondent is charged with receiving a check for a $500 earnest money deposit from the contract purchaser of a parcel of real estate and failing to immediately deposit that check in a solvent bank, savings and loan association, trust company or title company having trust powers, in an escrow or trust account, thereby also allegedly violating Section 475.25(1)(d), Florida Statutes, amended as Section 475.25(1)(e) Florida Statutes (1979). In effect, the Respondent is charged with failing to promptly deposit the buyer's earnest money deposit in percent her trust account, instead retaining the buyer's check for approximately two weeks before making the required deposit; as well as her failure to advise the sellers that she had withheld those funds from deposit in such an account in alleged

contravention of the recitation and acknowledgment set forth in the contract of sale and purchase. This omission ascribed to the Respondent allegedly caused the sellers' residence to be removed from the real estate sales market from April 10 through May 8, 1979, thus supposedly precluding potential alternative sales for the property.

The Respondent has admitted the factual allegations contained in paragraphs 1, 2, 3, 5, 7 and 8 of the administrative complaint, with the exception of the first clause of paragraph 7. In effect, the Respondent has admitted to the truth of many of the details and circumstances surrounding the negotiation of the subject purchase and sale contract and the transfer of the subject binder deposit, but not to all, nor to any legal conclusions to be drawn there from.

The Petitioner presented three witnesses and one exhibit and the Respondent presented two witnesses and five exhibits. All exhibits were received into evidence.

FINDINGS OF FACT

1. Respondent Elizabeth E. Tice is a licensed real estate broker operating under the trade name of Betty Tice Realty, and is the holder of License No. 0089060. The Respondent operates her business from 1832 Victoria Avenue, Ft. Myers, Florida 33901.

   
   

2. On or about April 10, 1979, the Respondent negotiated a contract for the sale and purchase of a parcel of residential real property located at 3743

   S. E. 2nd Place, Cape Coral, Florida, between Robert C. and Kathryn H. Waite, as sellers, and Roy Rosenthal and Gloria Rosenthal, as purchasers. The contract price was $49,500. The face of the contract acknowledged receipt from the buyer of a $500 earnest money deposit to be held in escrow by the Respondent in the Betty Tice Realty Trust. The purchaser paid the earnest money deposit to the Respondent in the form of a personal check made payable to Betty Tice Realty Trust in the amount of $500. He instructed the Respondent to hold that check without depositing it in her trust account until he had returned to his home in New Jersey the next day and ascertained that there were sufficient funds to secure payment of the check. He would thereupon immediately call her and advise her to deposit the check. Immediately after the buyer had executed the contract, the Respondent presented it to the seller's agent, Mr. William B. Waite, a real estate salesman, who is the father of the seller, Robert C. Waite. Mr. Waite submitted the offer to his son and daughter-in-law, the sellers, on April 10, 1979, recommending that they accept it, which they did.

   
   

3. The Respondent upon the receipt of the binder check from the purchaser, did agree to hold the check without deposit until he called the next day to assure her that funds were on deposit to pay the check. She placed the check in a bank bag used in the normal course of her business, but inadvertently placed it in the wrong hag, that is, not the one commonly used to carrv cash and checks to the bank for deposit. The check reposed in the bank bag in her office for approximately two weeks before she recalled that she should have deposited it and called the pnrc-iaser in New Jersey to ascertain its validity. On April 25, 1979, upon suddenly remembering that the check was still in her possession, she immediately took it to the bank, deposited it and then called the Rosenthals to inform them. The check was presented for payment and returned by the New Jersey bank marked "insufficient funds". Upon learning of this on May 8, 1979, Mrs. Tice telephoned salesman, William B. Waite, and informed him that the proposed sale and purchase of his son's residence had gone awry by reason of the invalidity of the buyer's binder check.

4. The Respondent failed to inform the sellers that the earnest money deposit was not immediately deposited in the bank or in the trust account, but that failure was inadvertent and due to the fact that the Respondent simply forgot that she retained possession of the check in her office, rather than to any intentional scheme to mislead or deceive the sellers. Neither the sellers nor their agent made any inquiry regarding the status of the binder deposit prior to May 8, 1979 when they were informed of the problem.

   
   

5. It is indeterminable whether the property was withdrawn from the real estate market from April 10 through May 8, 1979. The property remained in the multiple listing service book depicting homes available for sale during the period April 10 through May 8, 1979. However, the President of the sellers' real estate firm indicated that the property was off the market as far as his office was concerned since his firm lost the listing for the property during that period. Similarly, it was not established that the property was not available for alternative contracts during that interim period of April 10 through May 8, 1979 and, if none were received by tie sellers, whether the failure to secure such "back-up" contracts was due to reliance on the contract involved in this proceeding.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this proceeding.

   
   

7. Section 475.25(1)(a) , Florida Statutes (1977) amended as Section 475.25(1)(b) Florida Statutes (1979) provides in pertinent part that the Board may suspend or revoke a license or otherwise fine or issue a reprimand to a licensee if it finds that the licensee is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction. Additionally, Rule 2IV-14.10, Florida Administrative ode, requires a licensed real estate broker who shall receive from his salesman, principal, prospect or other person interested in any real estate transaction, any deposit, funds, money, check, draft, personal property or item of value, to immediately place the same in a solvent bank, savings and loan association, or trust company or title company having trust powers, in an escrow or trust account.

   
   

8. There is no question, and indeed the Respondent has admitted, that she negotiated and obtained the purchaser's signature on the contract of sale and his $500 check for an earnest money deposit. There is no question that she agreed to forebear depositing the check until the purchaser returned to New Jersey and called her to assure her that funds were on deposit to pay the check. The Respondent did indeed fail to reveal the fact that she had not deposited the earnest money check in her escrow bank account contemporaneously with the execution of the contract, but there is no evidence to indicate that this was through any intentional effort to mislead, deceive, defraud or conceal this element of the transaction from the sellers, but rather was an effort by her to accord a brief accommodation to her client in this regard without prejudicing the sellers' rights. Her failure to mention her retention of the deposit check was shown by the Respondent to be wholly inadvertent and an oversight on tier part and the record shows that she retained possession of it and failed to mention it to the sellers because she simply forgot that it was retained in her office in her bank bag. Further, no definitive proof has been offered which establishes that the delay in the deposit of the check from April 10 through April 25th, nor the period of time from April 25th through May 8, 1979, when the bank dishonored the check, occasioned any detrimental reliance by the sellers on

   their belief that the contract was valid during this period of time. The record does not indicate that the sellers were forced to refuse any potential alternative sale of the property due to their belief in the validity of the subject contract until May 8, 1979 nor does it reflect the property was actually removed from the market in reliance on its validity, such that no proposed contracts could have been received during the relevant period of time.

   
   

9. Finally, it is persuasive to note that when the Respondent deposited the check on April 25, 1979 she took the precaution of telephoning the prospective purchaser to inform him that his check would now be processed by the bank and on May 8, 1979 when the First National Bank of Ft. Mayors notified her that the check was dishonored because of insufficient funds, she immediately, with no effort at concealment or other maneuver, telephoned the representative of the sellers and informed him of that fact and that therefore the proposed sale and purchase had been abrogated. Thus, the Respondent's overall course of conduct throughout the transaction, aside from judgmental frailty, demonstrates good faith, honesty and a lack of any intent to conceal, deceive, defraud or misrepresent the facts and circumstances surrounding the transaction to the sellers or their agent. It merely establishes that an unfortunate oversight and a technical violation of the above authority occurred without significant detrimental impact on the sellers' interests.

   
   

10. A number of significant decisions involving prosecutions of this type, have established the principal that suspension or revocation of a realtor's license is inappropriate in cases such as this where a technical violation of the pertinent authorities has occurred doe to inadvertence, or negligence, rather than any of the more blameworthy acts or omissions enumerated in the above Section. Thus, it has been held in Rivard v. McCoy, 212 So.2d 672 (Fla. 1st DCA 1968) that a broker's failure to place an earnest money deposit immediately in escrow indicated only a technical violation of this Section, which provides for revocation for that offense, but did not involve any dishonest or unscrupulous conduct properly punishable by suspension or revocation. The Court in Bred v. Jernigan, 188 So.2d 575 (Fla. 2nd DCA 1966) held, in the same vein:

    
    

    Chapter 475 vests in the Florida Real Estate Commission a broad discretionary power and authority to supervise a privileged business of real estate broker and to

    deal firmly with those engaged

    in it, even to the point of taking away their means of livelihood

    by revoca ton or suspension of license. But such potent administrative weapons must always be reasonably and cautiously,

    and even sparingly, utilized. Administrative processes of the commission should be aimed at the dishonest and unscrupulous operator, one who cheats, swindles, or defrauds the general public in handling real estate transactions.

    Here the $100 Young deposit was not misappropriated, or dissipated,

    or lost; and no one was hurt or prejudiced thereby.

    
    

    The Court went on to hold that the Commission's order finding that the Respondent in that case had irregularly handled a $100 deposit by failing to immediately deposit it in an escrow or trust account was a violation in a strict technical sense involving only an isolated item and did not relate to any dishonest or fraudulent acts or conduct on the part of the defendant and his real estate dealings with the public. The Court then opined that the disciplinary sections of Chapter 475 were never intended to be used as a basis for Suspension proceedings under circumstances such as these and that a nine month suspension of the defendant's license in that case was harshly inappropriate in light of the technical, isolated nature of the violation. The Court then imposed a $100 fine and upon rehearing changed that penalty to that of a private written reprimand.

    
    

11. The Court proceeded to state in discussing the nature of the charges which are analogous to those of the base at bar, that:

    
    

    . . . .fraud cannot be predicated on statements which are promissory in their nature, or constitute expressions of intention, and

    an actionable representation cannot consist of mere broken promises, unfulfilled predictions or expectations, or erroneous conjectures as to future events, even if there is no excuse for failure to keep the promise,

    and even though a party acted in reliance on such promise;

    nor . . . is the mere nonperformance of a promise evidence establishing fraud or lack of intent to perform.

    
    

12. The District Court of Appeal for the Second District in Peck v. Florida Heal Estate Commission, 204 So.2d 355 (Fla. 2nd DCA 1967), in a case very similar on its facts to the instant proceeding, reached a similar conclusion. The Commission in that case found the Petitioner, the realtor involved, guilty of fraud, breach of trust, concealment and dishonest dealing in a business transaction for failure to immediately place with his broker a check entrusted to him as the broker's agent as well as collecting money in a name other than that of his registered broker. The Court, however, found, based upon the facts, that the realtor was not attempting to cheat or defraud anyone and that no person was hurt or prejudiced by his actions. The Court then held that the record in that case, like that in the case at bar, involving merely a failure to timely remit over moneys by the realtor to the party due them is only a technical violation with extenuating circumstances (i.e., the demonstrated lack of intent to defraud or conceal) and the Court ruled that a suspension of the realtor's license in that event was not compatible with the violation proven. Therefore the Commission was directed to enter an order imposing only a reprimand on that Petitioner.

    
    

13. In similar fashion, in the instance case, the Respondent is guilty of only a technical violation of the authority under which she is charged. There was no demonstration in this record that she attempted to cheat, defraud anyone

or conceal any facts or elements of the transaction which any other party was entitled to be informed of. At most, she merely failed to timely comply with an element of the contract of sale, to wit, transfer of the binder deposit, and with a like requirement of the above authority under which she is charged.

Although tardy in doing so, she ultimately complied with the law and no prejudice was shown to be occasioned to any party connected with this transaction, especially due to the fact that the subject property ultimately sold for $1,000 more than the subject contract price. Thus, the Respondent can only be deemed to have been guilty of an error of judgment. Thus, it must be concluded, based upon this record, that the Respondent has violated Section 475.25(1)(a), Florida Statutes (1977), as amended, by acting in a culpably negligent manner, however, in view of the demonstrated lack of scienter involved in this violation, as well as the fact that no party to the transaction was shown to have been prejudiced by her actions, only a minimal penalty is warranted. Accordingly, in view of the extenuating circumstances of this case discussed above, as well as the guidance afforded by the above decisional authority, it is concluded that only a private written reprimand should be imposed by the Board upon the Respondent.

RECOMMENDATION

Having considered the evidence in the record, the foregoing findings of fact and conclusions of law, the candor and demeanor of the witnesses, as well as the pleadings and arguments of counsel, it is

RECOMMENDED that the Respondent, Elizabeth E. Tice, be found guilty of culpable negligence pursuant to Section 475.25(1)(a), Florida Statutes (1977), as amended, and that the penalty of a private written reprimand be imposed on the Respondent.

DONE AND ENTERED this 13th day of February, 1981 in Tallahassee, Leon County, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 1981.

COPIES FURNISHED:

S. Ralph Fetner, Jr.

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Harry A. Blair, Esquire 2149 McGregor Boulevard Post Office Box 1467

Fort Myers, Florida 33901

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION

DEPARTMENT OF PROFESSIONAL REGULATION, & BOARD OF REAL ESTATE,

Petitioner,

vs. CASE NO. 80-1832

PD 18824

ELIZABETH TICE,

Respondent.

/

FINAL ORDER

This cause came to be heard by the Board of Real Estate on March 17, 1981, for the purpose of issuing a final order in the above cited case. A formal hearing resulted in the rendering of a recommended order from Division of Administrative Hearings, P. Michael Ruff, Hearing Officer, on February 13, 1981.

The said recommended order, attached hereto as Exhibit A, is hereby adopted by the Board of Real Estate as to Finding of Fact, and Conclusions of Law as its own order and is incorporated herein by reference. However, as to the Recommendation, the Board of Real Estate upon a complete view of the record hereby ORDERS that the Respondent be given a public reprimand and fined $100.00. This Order shall be effective thirty (30) days from the date of filing with the clerk of Department of Professional Regulation.

DONE AND ORDERED this 17th day of March 1981, in Orlando, Florida.

Virginia Bishop, Chairman Board of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Mail to Harry Blair, Esquire, Post Office Box 1467, Fort Myers, Florida 33902 and Ralph Fetner, Jr., Department of Professional

Regulation, 130 North Monroe Street, Tallahassee Florida 32301 this 26th day of March, 1981.

C. B. STAFFORD

Docket for Case No: 80-001832

Orders for Case No: 80-001832