STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF ) REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 85-2476

)

PEDRO F. HERNANDEZ and )

PEDRO REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, The Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a public hearing in the above-styled case on October 16, 1985, in Miami, Florida.

APPEARANCES

For Petitioner: James R. Mitchell, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Robert J. Lewison, Esquire

P. O. Box 560354

Miami, Florida 33183 PRELIMINARY STATEMENT

By Administrative Complaint filed July 23, 1985, Petitioner, Department of Professional Regulation, Division of Real Estate (Department), charged Respondents Pedro Hernandez and Pedro Realty, Inc. with failing to account or deliver deposit monies received in trust and failure to promptly notify the Florida Real Estate Commission of having received conflicting demands on the deposit monies, in violation of Section 475.25(1)(d), Florida Statutes.

At final hearing the Department called Suzanne Lee Lilienthal, Vivian Gonzalez Jaime, Oscar Delgado, Hector Sierra, Ana Flores, and Orfa Martinez, as witnesses. The Department's Exhibits 1-15 and 17 were received into evidence. Respondents called Manuel Oscar Rodriguez, Zoraida Martinez, Pedro Hernandez, and Robert J. Lewison, as witnesses. Respondents' Exhibits 2 and 3 were received into evidence.

The Department has submitted proposed findings of fact, and they have been reviewed and considered. A ruling has been made on each proposed finding of fact in the appendix to this Recommended Order. No proposed findings of fact have been submitted on behalf of Respondents.

FINDINGS OF FACT

1. Respondent, Pedro F. Hernandez, was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0038833. Hernandez was at all times material hereto the owner and sole qualifying broker for Respondent, Pedro Realty, Inc., a Florida corporation, registered as a real estate broker, license number 0067966.

   
   

2. On July 19, 1984, Pedro Realty, Inc., procured a contract between Orfa Martinez and Ana Flores, purchasers, and Mr. and Mrs. Hector Sierra, sellers, for the sale of the Sierra's home. Pursuant to the terms of the contract, the purchasers deposited $3,000.00 with Pedro Realty, Inc., to be held in escrow subject to the terms of the contract.

3. Pertinent to this case, the contract provided: NEW INSTITUTIONAL FIRST MORTGAGE

   Purchaser shall obtain a first mortgage for

   the balance of the purchase price from a Federal Savings and Loan Association or other institutional lender at the prevailing interest rate . . . . Purchaser shall have only 45 days to apply for and obtain approval for said mortgage, and Purchaser shall make a diligent effort to obtain said mortgage . . .

   
   

   * * *

   MORTGAGE CONTINGENCY

   If, after diligent effort on the part of the Purchaser, the Purchaser is unable to obtain and/or qualify for said First Mortgage, all monies deposited hereunder shall be refunded to Purchaser and parties herewith agree to enter into a Release of Purchase and Sale Contract, and the contract shall be declared null and void.

   
   

4. On July 21, 1984 the purchasers applied for a mortgage loan with Century Funding Corp. By letter of November 7, 1984, the purchasers and Pedro Realty, Inc. were notified that their application had been denied.

   
   

5. In the interim the seller's attorney, by letter of September 21, 1984, notified the purchasers that the sellers considered the purchasers in default because of their failure to secure the new first mortgage within 45 days of the date of the contract. However, the sellers agreed to waive the default if the purchasers proceeded diligently with the lender.

   
   

6. By October 24, 1984, the new first mortgage had still not been obtained. Consequently, the seller's attorney notified the purchasers and Pedro Realty, Inc., that the contract was in default and demanded that:

   
   

   Pedro Realty, Inc. release the deposit to me or my clients as partial damages.

   
   

7. Upon the denial of their mortgage application, the purchasers demanded the return of their deposit from Pedro Realty, Inc. Subsequently, the attorney for Pedro Realty, Inc., by letter of November 30, 1984, advised all parties of the conflicting demands. His letter concluded:

   
   

   The purpose of this letter is to invite all interested parties to exert their best efforts to resolve this matter by immediately beginning serious discussions regarding the same. In the event an agreement is reached, it must be in writing signed by all parties. In the event an agreement is not reached by December 15th, we will have no alternative than to notify the Florida Real Estate Commission and

   interplead the 53,000.00 into the Registry of the Dade County Circuit Court.

   
   

8. While some settlement discussion may have occurred between the principals in early December, 1984, it was unproductive. Clearly, no agreement was reached by December 15, 1984, and no discussions were held thereafter. However, Pedro Realty, Inc. took no further action until the Department advised it on March 8, 1985, that the purchasers had filed a complaint regarding their deposit.

   
   

9. By letter of April 20, 1985, the attorney for Pedro Realty, Inc. requested that the Department provide him an escrow disbursement order form. However, on April 30, 1985, the Department refused his request and advised him that the request had to be submitted by the broker.

   
   

10. On May 3, 1985 Pedro Realty, Inc. requested the escrow disbursement order form from the Department. The form was forwarded by the Department on May 10, 1985, and the completed form was filed with the Department May 23, 1985. On August 26, 1985 the Department issued an escrow disbursement order that the funds be disbursed to the purchasers

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

12. The allegations in this case are that Respondents violated Section 475.25(1), Florida Statutes. That section provides in pertinent part:

    
    

    The commission may deny an application for licensure, registration or permit, or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke a· license or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:

    
    

    (d) Has failed to account or deliver to any person, . . . upon demand of the person

    entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, . . . 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 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 escrow 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 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)

    
    

13. The Department has established by clear and convincing evidence that Respondents failed to deliver to the purchasers, upon demand, their deposit of $3,000.00. While there may have been conflicting demands upon Respondents for the deposit monies, that fact affords no justifiable excuse for Respondents' failure, since they did not promptly notify the commission of the conflicting demands and employ one of the escape procedures contained in Section 475.25(1)(d), Florida Statutes.

Based on the foregoing Findings of Fact and Conclusions of Law, it is:

RECOMMENDED that the Department enter a Final Order:

1. Suspending Respondents' real estate licenses for thirty

   (30) days.

   
   

2. Imposing an administrative fine against Respondents in the sum of $1,000.00.

DONE AND ORDERED this 10th day of December, 1985, at Tallahassee, Florida.

WILLIAM J. KENDRICK

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 10th day of December, l985.

APPENDIX

A ruling on each of Petitioner's Proposed Findings of Fact has been made as follows:

1. Adopted in paragraph 1.

   
   

2. Adopted in paragraph 2.

   
   

3. Adopted in paragraph 3.

   
   

4. Adopted in paragraph 5.

   
   

5. Adopted in paragraph 6.

   
   

6. Not relevant.

   
   

7. Either not relevant or contrary to the facts as found in this Recommended Order.

8. Contrary to the facts as found in this Recommended Order.

   
   

9. Cumulative, argumentative.

   
   

10. Cumulative, argumentative.

    
    

11. Cumulative, argumentative.

    
    

12. Adopted in paragraph 10.

    
    

13. Adopted in paragraph 8.

COPIES FURNISHED:

Harold Huff, Executive Director Division of Real Estate Department of Professional

Regulation

Post Office Box 1900 Orlando, FL 32802

Fred M. Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, FL 32301

James R. Mitchell, Esq. Department of Professional

Regulation, Legal Post Office Box 1900 Orlando, FL 32802

Robert J. Lewison, Esq. Post Office Box 560354 Miami, FL 33183

Salvatore A. Carpino, Esq. General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, FL 32301

Docket for Case No: 85-002476

Orders for Case No: 85-002476