STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION )

)

Petitioner, )

)

vs. ) CASE NO. 83-2990

) JALIL RAZZAQ MUHAMMAD formerly )

known as Jimmie Robinson and ) BROKER JIM REALTY, INC., a/k/a )

Broker Jim, Inc., )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Miami, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on February 16, 1984. Respondent Jalil Razzaq Muhammad appeared on his own behalf. Petitioner was represented by counsel:

Tina Hipple, Esquire Post Office Box 1900 Orlando, Florida 32802

By administrative complaint dated July 7, 1982, petitioner alleged that respondents hold real estate licenses and, that "Jimmie Robinson was at all times material herein owner and operator of Broker Jim Realty, that torn or about October 6, 1981, a listing agreement was entered into by Laverne Lockhart and Faith Willis as joint owners and Respondent Broker Jim's Realty, Inc., for the property known as 1535 N.W. 116th Street, Miami"; that on "or about November 25, 1981, Kenneth Wilson agreed to...buy the property...[and] gave...Broker Jim Realty, Inc., a deposit of $1,000.00; that the "contract recited that if the sale did not close due to any default or failure on the part of the buyer, the seller could direct the escrow holder to pay the deposit o the seller, less a brokerage fee not to exceed one half of the deposit"; that the transaction did not close; that "Laverne Lockhart requested that Respondent Jimmie Robinson pay the deposit money to her pursuant to the contract," but that neither respondent did pay her; and that the money was eventually used by Wilson as a deposit toward the purchase of another house listed by respondents; all in violation of the requirement of Section 475.25(1)(d), Florida Statutes (1981), that respondents "account or deliver to any person...money...which [t]he[y] had no right to keep."

FINDINGS OF FACT

1. At all pertinent times, both respondents held real estate broker's licenses. The corporate license is No. 0222663 and the individual license is

   No. 0159888. The individual respondent has been the only owner of the corporate respondent and the only broker the corporation has ever employed.

   
   

2. At one time Angela Lewis worked for Broker Jim, Inc. as a licensed real estate salesperson. On October 6, 1981, it was she who signed, on the broker's behalf, a listing agreement with Laverne Lockhart and Faith Willis, the sisters who jointly owned the house at 1535 NW 116th Street in Miami, Florida (the house) . Petitioner's Exhibit No. 2.

   
   

3. Kenneth G. Wilson, who wanted to buy the house, had $5000 available. The house was encumbered with a mortgage in the approximate amount of $33,000 and the sisters eventually agreed to take $44,000 for the property. On the form contract signed by both owners and Mr. Wilson, and dated November 25, 1981, under the heading "Terms and conditions of Sale:", the following was typewritten:

   
   

   1,000 as mentioned above. Purchaser agrees to make an additional deposit in the amount

   $4,000 before closing. Purchaser agrees to assume an existing first mortgage in the Approx. amount $33,000, payab[l]e $340.00

   P.I.T.I at 10.5 percent per annum in accordance with the terms and conditions set forth therein.

   Purchaser to obtain a P.M. 2nd mort[g]age in the amount of $6,000 at 18 percent per annum payable Approx. $152.37 for a period of 5 yrs. Balance of purchase price to be

   paid in cash or cashier check at time of closing. Property being purchased in its present as is condition.

   
   

   Petitioner's Exhibit No. 3.

   
   

   Elsewhere on the printed form appears the following:

   
   

   When this contract is executed by the purchaser and the seller and the sale

   is not closed due to any default or failure on the part of the purchaser, the seller, at his option, may seek to enforce this contract, or else the seller may direct

   the holder of the deposit to pay the broker his brokerage fee not to exceed one-half

   of the deposit and to pay the balance of the deposit to the seller as consideration for execution of this agreement, and the

   holder of the deposit shall be held harmless by all parties for disbursement in accordance with this agreement.

   
   

   Petitioner's Exhibit No. 3.

   
   

   Ms. Lewis prepared the form contract. Mr. Muhammad, as he is now known, read it over and approved it. In retrospect, he believes this was a mistake, because the contract fails clearly to reflect the parties' understanding that the offer was contingent on Mr. Wilson's ability to borrow $6,000, to be secured by a second mortgage on the house.

4. A deposit ticket dated November 25, 1981, accompanied Mr. Wilson's check for $1000 when respondents deposited it to their escrow account. The bank credited the escrow account on December 1, 1981.

   
   

5. Neither Mr. Wilson's efforts to obtain a loan, nor those of respondents on his behalf, availed, and word reached Ms. Lockhart that the transaction was doomed for want of sufficient purchase money. Over the phone, Ms. Lockhart told Helen Jackson, respondents' secretary, that she wanted a "refund" of the deposit. A lawyer Ms. Lockhart consulted communicated a similar demand to respondent Muhammad personally. Respondents gave Ms. Lockhart no money and no accounting.

   
   

6. The money stayed in respondents' escrow account until it was used on Mr. Wilson's behalf in the purchase of another house respondents had listed.

   
   

   CONCLUSIONS OF LAW

   
   

7. In a matter as grave as license revocation proceedings, the duty allegedly breached by the licensee must appear clearly from applicable statutes or rules or have a "substantial basis," Bowling v. Department of Insurance, 394 So.2d 165, 173 (Fla. 1st DCA 1981), in the evidence. Disciplinary licensing proceedings like the present case are potentially license revocation proceedings, even in the absence of a recommendation of revocation, since the penalty for the infraction alleged lies within the discretion of the disciplining authority, if allegations of mis- conduct are established at a hearing. Florida Real Estate Commission v. Webb, 367 So.2d 201 (Fla. 1979). License revocation proceedings have been said to be "`penal' in nature." State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487, 491 (Fla. 1973); Kozerowitz v. Florida Real Estate Commission, 289 So.2d 391 (Fla. 1974); Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979)(reh. den. 1980).

   
   

8. At the formal hearing, petitioner had the burden to show by clear and convincing evidence that respondent committed the acts alleged in the administrative complaint, Walker v. State, 322 So.2d 612 (Fla. 3d DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 2d DCA 1966); See The Florida Bar v. Rayman, 238 So.2d 594 (Fla. 1970) and that the acts alleged are an appropriate basis for disciplinary action. Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981).

   
   

9. Petitioner's evidence established the allegations of the first twelve paragraphs of the administrative complaint, but failed to show any duty on the part of the respondents to pay over half the deposit to the owners, once the transaction foundered. The administrative complaint alleges that "the $1000.00 deposit....by right should have been forfeited to joint owners Laverne Lockhart and Faith Willis pursuant to the terms of the November 25, 1981, contract." But the contract requires forfeiture, and disbursement of half the deposit to the owners, only upon "default or failure on the part of the purchaser." On this record, there has been no clear and convincing showing of any default or failure to perform by the purchaser.

   
   

10. Among the "conditions of sale" was that the purchaser be able to obtain a second mortgage, which, according to Un- controverted testimony, he was unable to do, despite significant efforts. Although the condition could have been worded more artfully, it cannot fairly be construed as an undertaking to

    make a $6,000 payment, regardless of the purchaser's ability to obtain mortgage money. The language is:

    
    

    Purchaser to obtain a P. M. 2nd mortgage in the amount of $6,000

    at 18 percent per annum payable Approx.

    $152.37 for a period of 5 yrs. Petitioner's Exhibit No. 3.

    
    

    If, as petitioner evidently contends, this provision were designed to create an unconditional obligation on the part of the purchaser to pay $6,000, there would be no occasion to specify the interest rate, the monthly payment, or the term of years. A fair reading of this language requires the conclusion that the buyer's undertaking is contingent on the availability of mortgage money on terms at least as favorable as those set out in the contract. Instead of a default or failure to perform on the part of the purchaser, the evidence showed that a precondition to the purchaser's obligations under the contract was never met, despite the purchaser's good faith efforts.

    
    

11. The proper procedure in circumstances like those surrounding this transaction is set forth in Section 475.25(1)(d) Florida Statutes (1983):

    
    

    [I]f 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 commission of such doubts or conflicting demands and shall promptly:

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

    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 of judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure

to account for, deliver, or maintain the escrowed property.

Although the language is mandatory in form, petitioner did not charge respondents with failure to notify the board or take one of the three prescribed steps. Petitioner proceeded on the theory that respondents had not disbursed moneys to persons entitled to receive them. The evidence did not support this allegation. It would be a violation of due process to find respondents guilty of an offense not charged. Wray v. Department of Professional Regulation, 435 So.2d 312 (Fla. 1st DCA 1983) . See Department of Natural Resources v.

Sheffield, 420 So.2d 892, 893 (Fla. 1st DCA 1982); Robbins v. Florida Real

Estate Commission, 162 So.2d 535, 537 (Fla. 3d DCA 1964) It is, accordingly,

RECOMMENDED:

That petitioner dismiss the administrative complaint filed against the respondents.

DONE and ENTERED this 10th day of May, 1984, in Tallahassee, Florida.

ROBERT T. BENTON

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 10th day of May, 1984.

COPIES FURNISHED:

Tina Hipple, Esquire

P.O. Box 1900

Orlando, Florida 32802

Mr. Jimmie Robinson

c/o Broker Jim Realty, Inc. 13110 Northwest 7th Avenue Miami, Florida 33168

Harold Huff, Executive Director Department of Professional Regulation

Florida Real Estate Commission

P.O. Box 1900

Orlando, Florida 32802

Docket for Case No: 83-002990

Orders for Case No: 83-002990