STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 81-2021

)

GEORGE WESLEY STONE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. This hearing was conducted in the Hillsborough County Courthouse, at 419 Pierce Street, Tampa, Florida, on January 28, 1982. The Recommended Order is being entered following the receipt of the transcript of the proceedings on February 16, 1982. 1/

APPEARANCES

For Petitioner: Grover C. Freeman, Esquire

4600 West Cypress, Suite 410

Tampa, Florida 33607

For Respondent: George Wesley Stone, pro se

1001 4th Street North

St. Petersburg, Florida 33701

ISSUES

This case is presented in the form of an Administrative Complaint brought by the Petitioner against the Respondent. The Administrative Complaint, in its general terms, accuses the Respondent of improperly refunding deposit money to prospective purchasers of real estate in the face of a conflicting demand on that deposit money made by the prospective seller. These actions purportedly violate Subsection 475.25(1)(d), Florida Statutes.

FINDINGS OF FACT

1. Following the service of the Administrative Complaint discussed in the Issues statement to this Recommended Order, the Respondent indicated his disagreement with the matters set forth in that Administrative Complaint, to the extent of disputing allegations of fact contained in that document. In the face of this factual controversy, a Subsection 120.57(1), Florida Statutes, hearing was requested by the Respondent and the Petitioner forwarded the matter to the Division of Administrative Hearings for consideration. Subsequently, a formal hearing was held on January 28, 1982.

2. In the course of the hearing, Petitioner presented two (2) witnesses, Ernest Olinger and Patsy N. Baucant. The Petitioner also offered three (3) items of evidence which were received. Respondent testified and offered two (2) items of evidence which were admitted.

   
   

3. The petitioning agency is an agency of State government which has, among other functions, the licensure of real estate brokers and salesmen and the requirement to take disciplinary action when those brokers or salesmen are suspected of violating the regulatory provisions related to their right to operate as real estate salesmen and brokers. This duty on the part of the Petitioner forms the basis for the accusations placed against the Respondent.

   
   

4. At all times pertinent to this Administrative Complaint, Respondent was licensed and continues to be licensed as a real estate broker, having been issued License No. 00085431 by the Board of Real Estate in the State of Florida. The address of record for the Respondent, which is on file with the petitioning agency is: c/o G. W. Stone, Inc., 1001 Fourth Street North, St. Petersburg, Florida.

   
   

5. The Respondent maintains two offices, one at the 1001 Fourth Street North address and the other located at 14701 Gulf Boulevard, Madeira Beach, Florida.

   
   

6. During the period in question by the Administrative Complaint, Respondent was a broker in charge of and operated from the office at Madeira Beach which is part of the corporate arrangement, G. W. Stone, Inc. Respondent was one of the member-brokers of G. W. Stone, Inc. Respondent's son, Robert D. Stone, was a broker in charge of and operated from the Fourth Street North office in the relevant period.

   
   

7. On or about July 12, 1979, Ernest Olinger who was associated with G. W. Stone, Inc., in the position of real estate salesman, obtained a sales listing of a premises at 6823 Seventeenth Lane, North Meadow Lane, St. Petersburg, Florida, owned by one Patsy N. Baucant. At that time, Olinger was working out of the Fourth Street North office of the corporation. (Sometime between July 12, 1979, and October 9, 1979, Olinger was dismissed from this employment with that corporation and accepted a position with Bayfront Real Estate, Inc., in Pinellas County, Florida. Nonetheless, he continued to be associated with the Baucant listing.)

   
   

8. On October 9, 1979, another salesman employed by G. W. Stone, Inc., negotiated and obtained a contract for purchase of the Baucant property by Val Etter and Rita Locke. The terms and conditions of that purchase may be found in the sales agreement and deposit receipt which is Petitioner's Exhibit No. 2, admitted into evidence. This contract was signed by Etter and Locke and the seller, Baucant; with R. Holmes Campbell, the real estate salesman who negotiated and obtained the contract, witnessing the Etter, Locke and Baucant signatures and Olinger witnessing the signature by Baucant.

   
   

9. Etter and Locke paid $1,000.00 for earnest money deposit on account in contemplation of the purchase.

10. By the terms of the contract, the property conveyance was contingent upon transferring to the "purchaser" the existing mortgage at Sun Bank and Trust Company of St. Petersburg, Florida, at the prevailing assumption rate. In keeping with this provision of the contract, both Locke and Etter applied for the assumption of the mortgage. Etter was approved and Locke was disapproved on the loan application. A copy of the loan disapproval related to Locke may be found as an attachment to Petitioner's Exhibit No. 1, admitted into evidence.

    
    

11. Campbell then spoke to Olinger and advised Olinger that Locke and Etter had dissolved their living arrangement, which was an arrangement not based upon a formal marriage. Campbell also told Olinger that the closing of the property would have to be done in Etter's name, to the exclusion of Locke, and a closing date was established for November 30, 1979.

    
    

12. Olinger went to the closing on the date scheduled and was the only individual in attendance. The property never was closed.

    
    

13. Within a period of a few days following the scheduled date for closing, Baucant asked Olinger about the deposit money and was told that he did not handle those matters, in that it was not his function and that she should contact the Respondent. Baucant did in fact call the Respondent in the presence of Olinger. Baucant, in the course of that conversation, made known her desire to have the deposit money and asked what he intended doing with it. Stone's response was to the effect that at that time he, "did not know."

    
    

14. Baucant called the Respondent a couple of days later and he indicated that he had given the money to Rita Locke. Stone had in fact returned the

    $1,000.00 earnest money deposit to Rita Locke by payment from the escrow account of G. W. Stone, Inc. This took place on December 7, 1979. A copy of that check may be found as Petitioner's Exhibit No. 3, admitted into evidence. When confronted with his reasoning for disbursing this money, Respondent indicated to Baucant that Locke and Etter had a personal argument.

    
    

15. The money had been disbursed to Locke following demands by Etter and Locke made to Campbell who in turn advised the Respondent of the demand for refund of the earnest money.

    
    

16. From the facts presented, it is determined that Stone disbursed the earnest money deposit to Locke at a time when he knew that Baucant had a competing claim on that deposit money.

    
    

17. In the course of the hearing, Respondent denied that he had any conversation with Baucant concerning the topic of requests for the earnest money deposit in question. He made this denial on the basis of his failure to recollect such conversations. He did indicate that he had a policy to return deposits to prospective purchasers in circumstances such as set forth in the contract. In Stone's estimation, based upon what he knew of the matters, he returned the money to Locke because she was entitled to receive it.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.

    
    

19. The basis for discipline through this Administrative Complaint is premised upon an alleged violation of Subsection 475.25(1)(d), Florida Statutes, which states:

    1. Failed to account or deliver to any person, including a licensee under this chapter, 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, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission, or any secret or illegal profit, or any divisible share or portion thereof, 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 circumstances.

       However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account, the licensee shall promptly notify the board of such doubts and shall promptly:

       1. Request that the board issue an escrow disbursement order determining who is entitled to the escrowed property; or

       2. With the consent of all parties, submit the matter to arbitration; or

       3. By interpleader or otherwise, seek adjudication of the matter by a court.

          
          

          If the licensee promptly employs one of the escape procedures contained herein, and if he abides by the order or judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property; . . .

          
          

20. On the facts as presented in this cause, conflicting demands had been made concerning the subject of the earnest money deposit in the amount of

$1,000.00, and notwithstanding the Respondent's knowledge of these conflicting demands which had been made upon him for the escrowed property, he disbursed

$1,000.00 to Rita Locke, prospective purchaser. This action was contrary to the express mandate found within the provision which required the Respondent, in the face of such conflict and with the knowledge that the money in question was still in the escrow account, to promptly notify the Board of the existence of the conflict over entitlement and to request that the Board (a) issue an escrow disbursement order; (b) with the consent of the parties, submit the matter to arbitration, or (c) by interpleader or other method seek adjudication of the controversy before a court. This violation subjects the Respondent to the penalties set forth in Subsection 475.25(1)(d) Florida Statutes.

Based upon a full consideration of the facts found herein, the conclusions of law and being otherwise advised, it is

RECOMMENDED:

That a final order be issued finding the Respondent guilty of the violation as alleged and fining the Respondent $250.00.

DONE and ENTERED this 15th day of March, 1982, in Tallahassee, Florida.

CHARLES C. ADAMS, 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 15th day of March, 1982.

ENDNOTE

1/ The Petitioner, in the person of counsel, has offered a proposed recommended order, which has been reviewed prior to the entry of this Recommended Order. To the extent that that proposal is consistent with the Recommended Order, it has been utilized. To the extent that it is inconsistent with this Recommended Order, it is rejected.

COPIES FURNISHED:

Grover C. Freeman, Esquire 4600 West Cypress, Suite 410

Tampa, Florida 33607

George Wesley Stone 1001 4th Street North

St. Petersburg, Florida 33701

Docket for Case No: 81-002021

Orders for Case No: 81-002021