Judges: D. R. ALEXANDER
Agency: Department of Business and Professional Regulation
Latest Update: Dec. 14, 1984
Summary: Failure to return deposit for seventeen months constituted violation of law.
83-2673STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )
)
Petitioner, )
)
vs. ) CASE NO. 83-2673
) BENNY ISAIAH and GREATER REALTY ) OF ORLANDO, LTD., INC., )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, in Orlando, Florida, on October 18, 1984.
APPEARANCES
For Petitioner: James R. Mitchell, Esquire
Post Office Box 1900 Orlando, Florida 32802
For Respondent: Benny Isaiah, pro se
5750 Major Boulevard, Suite 107
Orlando, Florida 32805 BACKGROUND
By administrative complaint filed on July 28, 1983, petitioner, Department of Professional Regulation, Division of Real Estate, alleged that respondents. Benny Isaiah, a licensed real estate broker, and Greater Realty of Orlando, Ltd., Inc., a corporation licensed as a real estate broker, had violated various provisions of Chapter 475, Florida Statutes, for which disciplinary action against their licenses should be taken. More specifically, petitioner charged that in November 1982 respondents obtained a $2500 earnest money deposit from a prospective buyer on an offer to purchase a residence in Orlando, Florida, that a fully mutual executed sales contract was never executed, that the buyer demanded a return of his deposit, and respondents refused. Moreover, it is alleged they removed the deposit from their escrow account, and at the time the complaint was issued, respondents had steadfastly continued to refuse to return the deposit. Petitioner contends this conduct constitutes a violation of Subsections 475.25(1)(b), (d) and (k), Florida Statutes.
Respondents disputed the foregoing allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was referred by petitioner to the Division of Administrative Hearings on August 22, 1983, with a request that a Hearing Officer be assigned to conduct a hearing.
By notice of hearing dated October 3, 1983, a formal hearing was scheduled on October 20, 1983, in Orlando, Florida. Petitioner thereafter sought a continuance and the matter was rescheduled to February 14, 1984. At petitioner's request, the case was again rescheduled to March 21, and then to May 17, and finally to July 17, 1984. Respondent then requested a continuance which, with petitioner's agreement, was granted, and the matter was rescheduled to October 18, 1984, at Orlando, Florida.
At the final hearing petitioner presented the testimony of Arthur Zimand, David S. Brown, James A. McNabb, Jr., and James Claude Henderson. It also offered petitioner's exhibits 1 - 17; all were received in evidence. Respondent Isaiah testified on his own behalf.
The transcript of hearing was filed on October 31, 1984. Proposed findings of fact and conclusions of law were filed by petitioner on November 5, 1984, and have been considered by the undersigned in the preparation of this order.
Proposed 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.
The issue herein is whether respondents' real estate licenses should be disciplined for the alleged violations set forth in the administrative complaint.
Based upon all of the evidence, the following findings of fact are determined:
FINDINGS OF FACT
Respondent, Benny Isaiah, holds real estate broker's license number 0311124 issued by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Greater Realty of Orlando, Ltd., Inc., is a real estate broker corporation and holds license number 0223392 also issued by petitioner. When the events herein occurred, its offices were located at 66408 International Drive, Orlando, Florida. At all times relevant hereto, Isaiah operated as the qualifying broker for Greater Realty.
On or about November 2, 1982, Isaiah's wife, Dalia, a real estate salesman in respondent's fir, obtained an offer from Arthur Zimand to purchase a residence located at 9227 Bay Point Drive, Orlando, Florida, for $190,000. The residence was owned by Tran Van Don, a former Vietnamese army officer. In the contract for sale and purchase, Zimand established a closing date of February 1, 1983. He also gave respondent's firm a $2500 earnest money deposit to be held in escrow by Greater Realty which was placed in the appropriate escrow account as required by law. The contract provided that "(i)f the offer is not executed by both of the parties on (a date specified therein), the . . . deposit(s) shall be, at the option of the Buyer, returned to him and this offer shall thereafter be null and void."
The above offer was presented to the seller and rejected. Thereafter, Don prepared a counter-offer on November 9, 1982, which increased the sales price to $205,000 and changed the closing date to November 30, 1982.
After reviewing the counter-offer, Zimand agreed to all changes except the closing date of November 30, 1982. He could not agree to that date since he was unable to obtain sufficient funds to close the transaction until December
10, 1982. Accordingly, Zimand crossed out the closing date suggested by the seller, wrote in December 10, 1982, in its place, and initialed the change on the contract.
The later closing date was unacceptable to the seller and he did not accept Zimand's counter-offer. Therefore, no contract was executed by the parties. Respondents were so notified by the seller's attorney by letter sent on November 23, 1982. The letter advised them that the seller would not accept the closing date of December 10, and that accordingly no contract between the two parties existed.
On November 24, 1982, Zimand wrote respondent's wife a letter in which he withdrew his offer and requested a prompt refund of his $2500 deposit.
On December 3 and 11, 1982, respectively, Zimand and Don executed a "release of deposit receipt" wherein both parties instructed respondents to disburse the deposit held in escrow to Zimand. By signing the release form, the seller acknowledged that he had no interest in the deposit monies. The document was mailed to respondents on January 11, 1983. This was followed by a letter to Isaiah from Zimand's attorney on January 25, 1983, again requesting a refund of the deposit within ten days. Despite these requests, Isaiah did not refund the deposit.
On or about December 8, 1982, Isaiah withdrew the $2500 from his escrow account. The disposition of those funds is not known.
Zimand later instituted a civil action against Isaiah seeking to recover his deposit. He also filed a complaint with petitioner. On May 9, 1984, or just before the matter went to trial, Isaiah returned the deposit to Zimand. This was some seventeen months after Zimand first requested a refund of his deposit.
Isaiah contends there was a valid contract between Zimand and Don, and that they used a "technicality" (a dispute over closing dates) to get out of closing the transaction. Because of this, he believes he was originally entitled to keep the $2500 as a sales commission. He also contended that his wife is the person who should be involved in this proceeding rather than him since she negotiated the contract and is more familiar with the details of the contract. Finally, he asserts the dispute has no clear-cut answer, and falls within a "gray" area. As such, he was justified in his actions.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.
Subsection 475.25(1)(d), Florida Statutes, makes it unlawful for a licensee to:
. . . fail to account or deliver to any person . . . 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 . . . deposit . . . which has come into his hands
and which is not his property on which he is not in law or equity entitled to retain under the circumstances. . . .
Respondents are charged with violating the foregoing statute by failing to account and deliver a deposit to Zimand to which he was entitled to receive.
The evidence discloses that respondents did indeed refuse to return a
$2500 deposit to Zimand for almost a year and a half despite repeated requests to do so. Under the foregoing statute, the only issue requiring resolution is whether Zimand was entitled to receive the deposit. Isaiah contends a valid contract between the buyer and seller existed, and that he was initially justified in retaining the same as a commission. But it is axiomatic that without a meeting of the minds of the parties on an essential element, there can be no enforceable contact. See, for example, Hettenbaugh v. Keyes-Ozon-Fincher Insur., Inc., 147 So.2d 328 (Fla. 3rd DCA 1962); Goff v. Indian Lakes Estates, Inc., 178 So.2d 910 (Fla. 2nd DCA 1965). Here the parties did not agree on the closing date, and without the requisite meeting of the minds as to this essential element, no contract existed. Therefore, under the terms of the contract for sale and purchase, Zimand was entitled to a refund of his deposit upon his request. By failing to account and deliver said deposit for over seventeen months, and doing so only after being faced with both a trial and disciplinary action, it is concluded that respondents have violated Subsection 475.25(1)(d), Florida Statutes. 1/
Respondents are also charged with fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. This illicit conduct is alleged to have occurred while respondents handled the Zimand transaction. In its proposed order, petitioner has narrowed the charges to include only false pretenses, dishonest dealing and breach of trust in a business transaction.
None of the terms are defined by statute or rule, and no agency precedent or judicial decisions has been offered to clarify what type of misconduct falls within those terms. However, case law suggests that in order to be guilty of false pretenses and dishonest dealing, a licensee must evince an intent to violate the law. Bouchelle v. Fla. Real Estate Commission, 188 So.2d 60 (Fla. 1st DCA 1966). Here there was no such intent, and this portion of the charges must fail. As to the charge of breach of trust, the evidence discloses that Isaiah and the corporate licensee did indeed violate the trust imposed upon them to return the deposit, and a violation of Subsection 475.25(1)(d) has accordingly occurred.
Finally, respondents are charged with "failure to maintain a deposit entrusted to the respondents in their capacity as a real estate broker in a trust or escrow account maintained at a bank or other proper depository in violation of Subsection 475.25(1)(k), Florida Statutes." The evidence discloses, and respondents readily concede, that they withdrew the Zimand deposit from their escrow account on December 8, 1992. By doing so, respondents have violated the foregoing statute, and are guilty as charged in Count III of the complaint.
Petitioner recommends that the licenses of both respondents be suspended for two years and that each licensee pay a $1000 administrative fine. This appears to be too serious given the circumstances of the case. Instead, a six month suspension of each respondent's license and a $500 administrative fine for each is more appropriate.
RECOMMENDATION
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondents be found guilty of Counts I, II and III of the administrative complaint, that their licenses be suspended for six months, and each pay a $500 administrative fine within forty-five days after a final order is entered in this cause.
DONE AND ENTERED this 8th day of November 1984 in Tallahassee, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 8th day of November 1984.
ENDNOTE
1/ It is also noted that if Isaiah was in doubt as to what to do, Subsection 475.25(1)(d) specifies the steps that a broker should take to resolve those doubts. Isaiah failed to take any step outlined in the statute.
COPIES FURNISHED:
James R. Mitchell, Esquire Post Office Box 1900 Orlando, Florida 32802
Benny Isaiah
5750 Major Boulevard, Suite 107
Orlando, Florida 32805
Harold Huff, Executive Director Division of Real Estate
400 West Robinson Street Orlando, Florida 32801
Fred Roche, Secretary
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Docket for Case No: 83-002673
Orders for Case No: 83-002673
