Judges: D. R. ALEXANDER
Agency: Department of Business and Professional Regulation
Latest Update: Nov. 01, 1982
Summary: Waiting one year to notify commission of escrow dispute is unreasonable.
81-3185STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, BOARD OF REAL )
ESTATE, )
)
Petitioner, )
)
vs. ) CASE NO. 81-3185
)
RALPH A. CALL, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings, by its duly designated Hearing Officer, DONALD R. ALEXANDER, on March 17, 1982, in Fort Myers, Florida.
APPEARANCES
For Petitioner: James H. Gillis, Esquire
130 North Monroe Street Tallahassee, Florida 32301
For Respondent: Dennis J. Pehak, Esquire
1411 Bayview Street
Fort Myers, Florida 33901
In its Administrative complaint dated September 29, 1981, Petitioner, Department of Professional Regulation, Board of Real Estate, has charged Respondent, Ralph A. Call, with having violated Subsections 475.25(1)(d) and (e), Florida Statutes (1979), for which disciplinary action against his real estate broker's license should be taken. In brief, Petitioner alleges that:
Respondent, acting as agent for the sellers of certain property, accepted a deposit from the buyers for the purpose of securing a contract far sale and purchase of said property; that the sellers were unable to deliver marketable title to the property at the time of closing, thereby breaching the contract; that the buyers demanded a return of their deposit; that Respondent refused to disburse the deposit, and that his refusal constitutes a violation of Subsection 475.25(1)(d), supra; and (2) that on December 4, 1980, 1/ Respondent requested that the Board of Real Estate issue an escrow disbursement order determining who was entitled to the deposit; that a lawful order issued by the Board on March 17, 1981, ordering Respondent to disburse the deposit to the buyers; that by letter dated March 31, 1981, Respondent advised the Board he would not obey the order; and that his refusal to obey a lawful order of the Board constitutes a violation of Subsection 475.25(1)(e), supra.
Respondent timely requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the charges. On December 18, 1981, Petitioner forwarded the matter to the Division of Administrative Hearings with a request that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated February 2, 1982, the final hearing was scheduled for March 2, 1982, in Fort Myers, Florida. At the request of the Respondent, and with the consent of Petitioner, the matter was rescheduled to March 17, 1982, at the same location.
At the final hearing, Petitioner called Henry Norton as its witness and offered Petitioner's Exhibits 1-4, each of which was received into evidence. Respondent testified on his own behalf, presented the testimony of Charles F. Green, Jr., and offered Respondent's Exhibit 1 which was received into evidence. By agreement of the parties, the sworn answer to Petitioner's Request for Admissions was received into evidence as Hearing Officer's Exhibit 1.
The transcript of hearing was filed on April 6, 1982. Proposed findings of fact and conclusions of law were filed by Petitioner on April 7, 1982, and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached, or were not supported by competent and substantial evidence.
At the outset of the hearing, Petitioner withdrew Count I of its Administrative Complaint. Remaining at issue is whether Respondent's real estate broker's license should be suspended or revoked, or whether he should otherwise be disciplined for allegedly violating a lawful order of the Board of Real Estate.
Based upon the entire record, the following findings of fact are determined:
FINDINGS OF FACT
At all times relevant hereto, Respondent, Ralph A. Call, held real estate broker's license number 0012490 issued by Petitioner, Department of Professional Regulation, Board of Real Estate. Respondent was active broker for a real estate firm located at 1648 Periwinkle Way, Sanibel Island, Florida.
At an undisclosed time Respondent purchased Apartment 503, Sandlefoot Condominiums, located on Sanibel Island and later sold it to Eric and Enid Winson. As part of the purchase price, Call agreed to take back two unsecured notes totaling $43,211.73. In February, 1979, the Winsons listed the condominium through Respondent's office. It was agreed that Respondent would obtain all or partial satisfaction of the notes from the proceeds of the sale.
On or about March 9, 1979, the Winsons entered into a contract to sell Wolf and Marie Fudikar the condominium for a price of $107,000. Under the terms of the contract, the buyers gave Respondent a $10,690 cash deposit to be held in escrow pending the completion of the sale. The contract also required the sellers to deliver a marketable title to the property. A closing date was set for on or before June 21, 1979. The buyers were represented by Henry Norton, an attorney in Miami, Florida, who was given power of attorney since the Fudikars resided in West Germany.
By mutual agreement of the parties, they verbally agreed to change the closing date to Friday, July 20, 1979. It was understood that the buyers would wire the money from Switzerland to Norton in Miami, who would then wire the money to a representative of Gulf Abstract Company in Fort Myers, in whose offices the closing was to be held. When no money was received, a representative of Gulf Abstract telephoned Norton that afternoon end was advised that Norton had not received the money from his clients and could not close. Respondent construed the failure of the buyers to close on that date as a possible breach of the contract.
A written standard title insurance binder was issued by Gulf Abstract for the July 20 closing. Although this commitment did not insure marketability, a representative of the firm could not recall any material exclusions or exceptions set out in the policy.
The following Monday or Tuesday after the scheduled July 20 closing, a local lending institution filed a lis pendens on the property and instituted a suit against the sellers for defaulting on another debt. Because of this cloud on the title, and other problems which arose, the buyers then reneged on their agreement since no marketable title could be furnished by the sellers.
After the sale fell through, both the buyers and sellers made claims for the deposit, each alleging that the other had breached the contract. Upon the advice of counsel, Respondent refused to return the deposit to the buyers since he could also be held liable to the sellers. Respondent finally contacted the Board's District Office in Fort Myers at a later undisclosed time seeking advice on what to do. He was told to call Tallahassee to get an opinion. He then made several telephone calls and wrote letters to various Department representatives or attorneys on December 4, 1980, January 17, 1981, February 19, 1981 and February 28, 1981 requesting that a disbursement order be issued.
On March 17, 1981, the Board of Real Estate issued an escrow disbursement order and held, inter alia, that under the terms of the contract closing was to occur no later than June 21, 1979, that no written modification of the terms regarding closing was made, that the sellers were unable to deliver clear title by June 21, and that because of this no contract for sale existed between the parties, and the buyers were not obligated to perform it accordingly ordered Call to disburse the deposit to the buyers. The order also noted that the Order ". . .(did) not provide (Call) with any immunity to any civil liability."
On March 31, 1981, Call wrote the Board the following letter:
Please be advised that I wish to appeal your decision because it was not based upon actual facts.
Please forward to me any form you may have available for this purpose.
I am willing and prepared to appear in person for cross examination if necessary, to get the true facts before your board.
Please advise.
Yours very truly,
/s/ Ralph A. Call
Counsel for the Board responded by letter on April 17, 1981, stating that "since the contract for sale was between the Fudickars (sic) and the Winsons, (Call was) not entitled to appeal the Escrow Disbursement Order. . ." and further that the "true facts" had already been presented.
Upon the advice of his attorney, Call did not comply with the order for fear of liability to the sellers if the deposit was given to the buyers. On March 16, 1982, one day prior to the final hearing, Call obtained a cashier's check in the amount of $10,690 made payable to Norton who represented the buyers.
During the entire controversy the deposit remained in Call's escrow account. There is no allegation that Call misused the funds or otherwise improperly dealt with the money while the dispute ensued.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.
As clarified at the hearing, the only charge against Respondent is that he ". . .is guilty of having violated a lawful order issued under the provisions of Chapter 475. . .in violation of Subsection 475(1)(e), Florida Statutes (1979)." The order in question is an escrow disbursement order issued by the Board pursuant to Subsection 475.25(1)(d)1, Florida Statutes.
Respondent readily acknowledged that he did not initially obey the escrow disbursement order but contended he had valid reasons for failing to do so. His reluctance stemmed from advice of two attorneys that the Board's order gave no protection for civil liability, and that under the facts, he was susceptible to a lawsuit by the losing party.
Subsection 475.25(1)(d), supra, reads in pertinent part: (1)(d). . .[i]f 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:
Request that the board issue an escrow disbursement order determining
who is entitled to the escrowed property;
* * *
If the licensee promptly employs on 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. (Emphasis supplied)
Petitioner contends that by Respondent waiting one year to comply with the order of the Board, his compliance ". . .cannot be deemed to be a prompt action as required by Subsection 475.25(1)(d), Florida Statutes." (Petitioner's Proposed Recommended Order). However, a close reading of the statute reveals that the Legislature intended only two things to be done in a prompt fashion:
(1) that a licensee promptly notify the Board of any doubts once a dispute arises, and (2) that he promptly utilize one of the three escape procedures enumerated in the statute. 2/ There is no requirement that, once an order is issued, the licensee must "promptly" comply with its terms. Nevertheless, the statute does contemplate that compliance be accomplished within a reasonable period of time. Here, Respondent waited one year to disburse the funds, and did so the day before the final hearing. Admittedly, he took no action upon advice of counsel, but it does not appear that either Respondent or his counsel notified the Board at any time between his letter of March 31, 1981, and the issuance of the Administrative Complaint on September 29, 1981, to offer reasons for failing to comply with the disbursement order. A period of one year cannot be construed to be a reasonable period of time in which to comply with the order, particularly where Respondent merely sat back and took no further action to rectify the situation. This being so, it is concluded that Respondent has violated Subsection 475.25(1)(d), Florida Statutes, by failing to comply with the lawful order is sued by the Board within a reasonable period of time.
In mitigation, Respondent apparently acted in good faith and upon advice of counsel in refusing to immediately obey the order. Further, there is no allegation that any of the funds were improperly handled or not retained in the escrow account during the entire controversy. Accordingly, a public reprimand is appropriate punishment given the circumstances of this proceeding.
To avoid future debate over whether an order of the Board has been obeyed in a timely fashion or not, it is suggested that escrow disbursement orders specify a time limitation within which compliance with the order must be met. In this way, a licensee will know that disciplinary action is imminent unless he abides by the order by a date certain. Otherwise, licensees are left to speculate as to the conduct that the Board might require in order to avoid disciplinary action. See Anheuser-Busch, Inc. v. Department of Business Regulation, 393 So.2d 1177, 1181 (Fla. 1st DCA 1981).
RECOMMENDATION
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Ralph A. Call, be found guilty as charged in
Count II of the Administrative Complaint and be given a public reprimand.
DONE and ENTERED this 16th day of April, 1982, in Tallahassee, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1982.
ENDNOTES
1/ The Administrative Complaint alleged that a request for a disbursement order was made on March 13, 1979; however, the parties agreed that date should be changed to December 4, 1980.
2/ At the outset of the hearing, Petitioner voluntarily dismissed the charges in Count I. Because Respondent waited almost eighteen months to notify the Board and utilize one of the escape procedures, he may well have violated the requirement that such action be taken promptly. See Roberts v. Ayers, 380 So.2d 1057 (Fla. 1st DCA 1980). However, the dismissal of Count I renders this point moot.
COPIES FURNISHED:
James H. Gillis, Esquire
130 North Monroe Street Tallahassee, Florida 32301
Dennis J. Rehak, Esquire 1411 Bayview Street
Fort Myers, Florida 33901
Frederick H. Wilson, Esquire
130 North Monroe Street Tallahassee, Florida 32301
Samuel R. Shorstein, Secretary Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Carlos B. Stafford Executive Director
Florida Real Estate Commission
400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
Docket for Case No: 81-003185
Orders for Case No: 81-003185
